Salary sacrifice
Salary sacrifice is an arrangement between you and your employer where your employer agrees to make an extra contribution to your super from your salary before the income tax is taken out.
What are the benefits?
When you salary sacrifice you’re basically reducing your taxable income. This means you’re only paying 15% tax on the amount you salary sacrifice into your super account. This is a lot less than most marginal income tax rates.
What should you look out for?
Some employers might be able to use the amount you have elected to salary sacrifice to count toward their Superannuation Guarantee obligations. Most employers won’t do this, however, it’s a good idea to confirm this with them before you decide to salary sacrifice.
Small amounts can make a big difference
Putting an extra $35 a week into your super from age 35 could add around $58,500 to your final retirement payout. An extra $50 a week could add around $117,100. That's a small sacrifice now, for a bigger retirement payout.