Salary sacrifice payments are before tax contributions which are taxed at 15% on entry to your account.
What are the benefits of salary sacrificing?
Salary sacrifice payments are before tax contributions which are taxed at 15% on entry to your account. This means that if your income is taxed at more than 15% (rates range up to 47%), you may pay less tax (only 15%) on any before tax contribution you make.
Does it mean I get paid less each fortnight?
If you salary sacrifice super contributions you will have less take home pay each fortnight. However, this may be a tax effective way to save for your retirement if your personal tax rate is greater than 15% as the amount going into your super may be more than the amount your take home pay is reduced by.
The amount you decide to contribute is entirely up to you, so you can make sure it’s affordable and within your budget.
How do I set it up?
Most departments and agencies allow salary sacrificing but it’s best to confirm with your employer. You should keep in mind that it may be handled via a third party arrangement, not your employer.
If salary sacrificing is an option, you can instruct your employer or relevant third party to deduct your nominated salary sacrifice amount from your regular pay. Once it’s set up, the nominated amount will automatically be deducted from your salary and deposited into your PSSap account until you ask them to stop.