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Salary sacrificing

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Whatever your age or stage of work, making salary sacrifice contributions is a tax-effective way to top up your super. Salary sacrificing could also reduce the income tax you pay.

Under a salary sacrifice arrangement, you instruct your employer to make a super contribution from your pre-tax salary. Although you pay contributions tax on the money going into the super fund, a lower gross salary could mean you pay less income tax. 

You also have the ongoing benefit that investment earnings in super are taxed at a maximum of 15%, whereas if you invested outside super the earnings would be taxed at your marginal tax rate (up to a maximum of 46.5%). This tax reduction means you have a larger amount to invest, which can make a big difference over time.

We can help you structure a salary package with your employer and incorporate salary sacrifice into your superannuation and retirement planning strategy.

When you get closer to retirement, you could take advantage of a transition to retirement strategy, which makes it possible to access some of your super in the form of a pre-retirement pension while you are still working. If you have reached your ‘preservation age' (which varies, starting at age 55 if you were born before 1 July 1960) and are still working, we can show you how you could salary sacrifice into your super while simultaneously drawing a pre-retirement pension. This tax-effective strategy could help increase your retirement savings.

To find out how a salary sacrifice strategy could work for you, call Shane Keary on 03 9533 0600 or email us.

Important Information
Financial Wisdom is responsible for financial planning advice provided by me as an Authorised Representative. Please refer to the Financial Services Guide (FSG) for the scope of my authority under Financial Wisdom. Financial Wisdom is not affiliated with nor does it endorse other business activities conducted by me.