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Read the transcript
Salary sacrificing
Salary sacrifice is a way of using some of your before-tax earnings to your advantage.
You might be familiar with using a salary sacrifice arrangement to lease a car or some equipment for your job. But you can also use this method to make extra contributions to your super.
There are two main benefits to salary sacrificing to super. First, it's an easy way to give you a super boost and help it grow faster. And second, it can help you save on tax.
Salary sacrificing to your super is something you arrange with your employer. Because it comes out of your salary before you've paid income tax, it's generally taxed as super at 15% and not at your marginal tax rate.
Depending on your circumstances, salary sacrifice can reduce the overall amount of tax you pay.
While topping up your super’s a great way to save, and even a little extra today can make a big difference tomorrow, it's important to be aware of the limits (or ‘caps’) the government sets on super contributions. So keep track of your super contributions by logging into your super account regularly. If you're a UniSuper member, checking your account is easy. You can use our award-winning app or log into your account via our website.
Before you start salary sacrificing, it's important to consider your situation. For example, it could be more effective for you to top up your super with your after-tax income. So it's best to check.
If you're keen to understand what your options are, why not speak with one of our super consultants? Appointments are available to anyone, online and in-person, at no additional cost, even if you're not a UniSuper member.
Whatever you decide, with UniSuper, it's easy to imagine a future worth retiring for. Visit unisuper.com.au/salarysacrifice to learn more.
The information contained in this video is of a general nature and doesn't consider your personal circumstances. Before making decisions, consider the relevant PDS and TMD on our website and your circumstances, and whether to seek financial advice. Investment returns can be positive or negative. Past performance isn’t indicative of future performance. UniSuper Advice is operated by UniSuper Management Pty Ltd ABN 91 006 961 799 (USM), which is licensed to provide financial product advice. USM is also the administrator of the fund UniSuper ABN 91 385 943 850 (UniSuper). UniSuper Limited ABN 54 006 027 121 is the trustee of UniSuper.
How to start salary sacrificing super contributions
- Speak to a financial adviser to discuss your personal financial situation and whether a salary sacrifice arrangement will work for you.
- Talk to your employer about how much you'd like to deduct from your pay, and they'll set up your automatic contributions.
Benefits of salary sacrificing
- Salary sacrifice contributions are taxed at 15%, which is generally lower than the tax you’d pay if you received it as take-home pay.
- It can reduce your taxable income so you may pay less income tax.
Things to consider
- Salary sacrifice super contributions count towards your annual $30,000 concessional contributions cap. See more about contribution caps.
- If you’re a low or middle income earner, after-tax contributions might be a better option as you could be eligible for a government co-contribution (eligibility criteria apply). Visit the ATO website.
- DBD members can make salary sacrifice super contributions as part of their default member contributions.
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Things you need to know
*Information contained on this website, including the accessible video content, as prepared and provided by UniSuper Management Pty Ltd ABN 91 006 961 799, AFSL No. 235907 (USM), is of a general nature only. Any advice provided doesn’t take into account your objectives, financial situation or needs. Before you act on any advice you should consider these matters, the relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD) and whether to consult a qualified financial adviser. For a copy of the PDS and TMD, call us on 1800 331 685 or go to unisuper.com.au/pds.
UniSuper Advice is a financial planning service generally available to UniSuper members, former members and their families through USM, which is licensed to provide financial advice services and deal in financial products. See unisuper.com.au/advice for more information, including the Financial Services Guide, or call us on 1800 331 685.
Prepared by USM on behalf of UniSuper Limited (ABN 54 006 027 121, AFSL No. 492806) the trustee of UniSuper (ABN 91 385 943 850) the fund.