What is salary sacrifice?

Salary sacrifice is an arrangement between you and your employer, where you choose to give up or 'sacrifice' part of your before-tax salary and put it straight into your superannuation. By doing so, you'll reduce your gross taxable salary, which means you could pay less income tax. Because money going into your superannuation is taxed at 15%, you may also pay less tax on the sacrificed amount (compared to if it was taken as cash and taxed at your marginal tax rate).

Salary sacrifice is available at your employer's discretion, so check with your employer to see if it's available to you.

How much can I salary sacrifice?

• If you're under 50, your concessional contribution limit is $25,000 per year.
• If you're aged 50 or over, your concessional contribution limit is currently $50,000 per year.

Concessional contributions include salary sacrificed amounts and any contributions from your employer (including the 9% compulsory contributions).

Contributions that exceed these limits will incur an additional tax of 31.5%, taking the total tax to 46.5% instead of the standard 15%.