Salary Sacrifice
Salary Sacrifice is an arrangement between you and your employer, where you can transfer part of your before tax salary into super to gain tax benefits.
How does it work?
If you earn over $6,000 a year you start paying income tax – 15c for each dollar over $6,000. If you earn over $35,000 it jumps to 30c in the dollar and so on. Salary sacrifice into your super lets you put your salary into super at a contribution tax rate (CTR) of a flat 15%. The amount of your taxable income is therefore reduced and may drop to a lower Marginal Tax Rate (MTR). Salary Sacrifice can give you a bigger bang for your buck to help meet your retirement goals.
Use ASIC’s superannuation calculator to see the difference salary sacrificing can make to your retirement savings.
It is important to remember that you generally cannot access any money you contribute to super until you reach your preservation age and retire.
Contribution Limit apply
Up until 30 June 2009, the concessional contributions cap was $100,000 per person per year for those aged 50 and over and $50,000 per person per year for those under 50. The higher limit for those aged 50 and over on the last day of the respective financial year is a transitional arrangement available until 30 June 2012. Since 1 July 2009 the caps have dropped to $50,000 and $25,000 respectively.
The Government announced on 2 May 2010 that from 30 June 2012 the limit for those 50 and over will remain at $50,000 per person per year for those with an account balance of less than $500,000.
However, in the Federal Budget 2012 rather than providing clarity on the operation of this measure, the Government has deferred its implementation by two years until 2014.
As a result of this deferral, the concessional contribution cap for everyone from 1 July 2012 (and until 30 June 2014) will be $25,000 per annum.
It is important to note that this cap includes:
- Contributions made via a salary sacrifice arrangement
- Mandatory Employer contributions (i.e. 9% Superannuation Guarantee)
- Additional voluntary employer contributions (this includes matched Employer contributions)
It will be important to review your existing circumstances to ensure that this lower concessional cap is appropriately targeted from 1 July 2012.
Co-contribution Deadline
The June 30 deadline for 2011 has passed. Don't leave it until the last minute for next year. If you are planning to take advantage of the Federal Government's hand out, you need to get your post tax contribution in before 5.00pm 29th June 2012. 
Find Lost Super
If you have had multiple jobs you may have some lost super with other funds. Find out how to track it down here.