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Salary Sacrifice is one of the simplest and most tax-effective ways to boost your super savings for an enjoyable retirement.
Salary Sacrifice contributions are paid under an arrangement between you and your employer whereby you agree to forego a portion of gross salary, which your employer then pays into your superannuation. These contributions count towards your annual concessional contribution limit.
With changes to the way super is taxed after age 60, Salary Sacrifice has become even more attractive for most Australians.
How does Salary Sacrifice work?
Salary Sacrifice is an arrangement between you and your employer where you forego part of your salary. In exchange, your employer contributes the money to your super.
This is separate from any employer support you already receive towards your super (for example Superannuation Guarantee contributions). For tax purposes, Salary Sacrifice contributions are treated as an employer contribution and will count towards your annual concessional contribution limit.
Contributions tax of 15% on the amount that is paid into your account by Salary Sacrifice is payable as the money goes into RBF. This is usually a low rate of tax compared to the rate you would have paid as income tax on that salary amount. For example, if you earn between $34,000 and $80,000, your marginal tax rate plus Medicare levy is 31.5%. By arranging to make Salary Sacrifice contributions, you can save 16.5% (the difference between 31.5% and 15%) in tax.
It's worthwhile assessing Salary Sacrifice as a contribution option, however, it will not be the best option for everyone. You can contact RBF to discuss your options.
If you'd like a snapshot of how Salary Sacrifice could benefit you, use RBF's Salary Sacrifice calculator.
Who can Salary Sacrifice?
Salary Sacrifice is available to most Tasmanian public sector employees, including members of the RBF Contributory Scheme.
Need more information on Salary Sacrifice?
If you would like more detailed information on Salary Sacrifice, please refer to the Salary Sacrifice fact sheet that relates to your Scheme.
You can also contact RBF directly to discuss Salary Sacrifice.
If you would like to invite an RBF speaker to your workplace or conference email your Business Relationship Officer at super@rbf.com.au
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