save on tax with salary sacrifice

Use your before-tax income to boost your super. With salary sacrificing you may score tax advantages, and grow your super faster at the same time. 

with salary sacrifice you can:

• grow your super over time with compound interest (earnings of interest on interest)
• save on taxes provided you keep your contributions within the Government prescribed limits 

 

calculate your final balance Want to see how much super money you could have when you retire, and how long it will last? Use our projections calculator, and see the difference topping up your super can make as well.

 

see the savings for yourself

  

	example with salary sacrifice	without salary sacrificing
Gross salary	$55,000	$55,000
Salary Sacrifice into super	$10,0001	$0
Adjusted salary  (before tax is taken out)	$45,000	$55,000
Income tax applicable	$8,8502	$11,8502
Net Salary	$36,150	$43,150
Plus Super Contribution	$8,500 ($10,000 less 15% tax)
TOTAL NET BENEFIT  (Super and Net Salary)	$44,650	$43,150

Note: The $8,500 net super contribution is a preserved benefit which can only be accessed once a condition of release has been met.

<sup>1.Subject to 15% Contributions tax (in this case $1500, assuming you have provided your TFN).
2. Based on 2006/07 tax scales, excluding Medicare Levy of 1.5%.</sup>

 

 

  

that's a $1,500 income tax saving with salary sacrifice! This also means $8,500 into your super account (net of tax).

make sure you are eligible

your age in 2006/07	can Health Super accept personal contributions?	can Health Super accept salary sacrafice?
18-64
65-74	You must have worked at least 40 hours in not more than 30 consecutive days in the current financial year.	You must have worked at least 40 hours in not more than 30 consecutive days in the current financial year.
75+

 

important changes from 1 July 2007

There are quite a few changes to superannuation that came into effect on 1 July 2007. Read through our Budget fact sheet to make sure you understand how these changes will affect you. If you are thinking about making a contribution, carefully read the ‘simpler contribution rules’ section.

 

how to salary sacrifice

Firstly, decide how much you’d like to make as a personal contribution. Use our superannuation calculator to see how much difference salary sacrifice (pre-tax) contributions can make to your superannuation benefit.  

1. check your employer offers salary sacrifice

   Salary sacrifice is an agreement between you and your employer.
   
   check: with your employer to make sure you can salary sacrifice into your super with them. If you have more than one employer, you will need to check with each employer individually.
   
   If your employer does not offer salary sacrifice, they may wish to refer to the ATO website for guidelines and regulations. However, the decision remains with your employer. 

2. nominate an amount

   Nominate a $ or % amount to be paid from your salary before it has been taxed.
   
   remember: Salary sacrifice may lower your taxable income, so it may also reduce the amount of compulsory Superannuation Guarantee that your employer pays. 
   That is a decision made by your employer.
   
   As each financial situation is different, you may wish to consult a Health Super Financial Services Planner before you decide to salary sacrifice. Call 1300 780 223 or visit their website at www.hsfp.com.au
   
   Find out more about regular payroll deductions. 

3. apply

   Download a save me tax with salary sacrifice form and return it to your HR or Payroll Officer so they can process your request.

 

tips: find out other ways to grow your super faster

• combine your super accounts and save
• track down your lost super, and roll it into Health Super
• personal contributions (make post-tax contributions)
• Member Investment Choice. See if you’re in the right investment choice for you