Salary sacrifice to super, typically referred to as ‘salary sacrificing’, is where you ask your employer to pay some of your pre-tax income into your super account. This payment is extra to the super guarantee (SG) payments your employer makes on your behalf. The extra payments you choose to make are referred to as concessional contributions.

Benefits of salary sacrificing

Some of the potential benefits of salary sacrificing you may be eligible for include:

• Boosting your retirement nest egg; and
• Paying less tax (conditions apply) 

Things to consider before you get started

Before you commit to putting part of your pre-tax income into your super, there are a few things worth considering: 

• Managing expenses – Check you can afford for part of your income can go to super. Ensure essential expenses and debts are still manageable.
• Contribution caps – Ensure you stay within the $30,000 contribution cap for the 2024-25 financial year for SG and salary sacrifice contributions Learn more on the ATO website.
• Income considerations – According to ASIC’s MoneySmart website, in general, salary sacrificing is beneficial for those earning over $45,000 annually. If you earn $37,000 or less, consider if the low-income super tax offset (LISTO) may better suit your unique financial situation and needs, subject to eligibility.

How much should I salary sacrifice?

The amount you should salary sacrifice will depend on what you can comfortably afford to take out of your income. Look at your budget and see how much you could afford to part with each pay cycle. 

How to get started salary sacrificing

Salary sacrificing into super is organised by your employer at your request. You do not need to go through your super fund to start salary sacrificing from your pre-tax income.

Steps to salary sacrificing into super:

1. Determine how much you are comfortable salary sacrificing.
2. Speak to your employer. You and your employer must prepare and sign a document that states the terms of the salary sacrifice arrangements.ie,
3. Look at your next pay slip. Make sure that this extra amount has been allocated to your super payments.
4. After three months log into your super fund account, or into the ATO via, to confirm the extra amount has been paid.
5. Make sure the amount you are paying still suits your budget and expenses. Keep in mind that this agreement is not set in stone, and you are able to change the amount that you wish to salary sacrifice at any time.  

Need help?

If you would like to speak to someone about making a before-tax super contribution, our Rest Advice team is always available to help you better understand and manage your super.

Our team of qualified and professional financial advisers* can help you:

• get your spare money working harder
• choose your investment choices
• secure your own and your family’s financial future with insurance, if something should happen to you
• learn about different types of super contributions
• build a plan to help you achieve your retirement goals.