info@remaccounting.com.au
  • (03) 8797 5399
  • Recent News – REM Accounting
    • Home
    • Our Difference
    • Services
      • Accounting & Tax
      • Self-Managed Superannuation Funds
      • Business Advisory
      • CFO Advisory
    • Resources
      • Recent News
      • Useful Links
    • Contact Us

    Salary sacrificing super

    By admin • 10 September 2019 • Super

    Contributing extra to your superannuation is a good way to boost your retirement funds. One of the ways you can add more to your super is through salary sacrificing. Salary sacrifice is an arrangement with your employer to forego part of your salary or wages in return for your employer providing benefits of a similar value, meaning your employer will redirect some of your salary or wages into your super fund instead of to you.

    These salary sacrifice contributions are taxed at a maximum rate of 15%, which is generally less than your marginal tax rate. There is no limit to the amount you can salary sacrifice provided there are no limitations in your terms of employment or industrial law. However, this concessional tax treatment is limited to a certain amount of contributions made each income year. Contributions over the relevant cap amount are subject to extra tax.

    The salary sacrificed amounts count towards your concessional contributions cap, in addition to your employer’s compulsory contributions such as super guarantee payments and salary-sacrificed amounts sent by you to your employee’s super fund. The annual concessional contributions cap is $25,000 for everyone. If you have more than one fund, all concessional contributions made to all of your funds are added together and counted towards the concessional contributions cap. Concessional contributions in excess of these caps are subject to extra tax.

    Salary-sacrificed amounts are paid from pre-tax salary so they don’t count as non-concessional contributions and will not be considered a fringe benefit if the super contributions are made to a complying super fund. Individuals should also consider whether the amount sacrificed will attract Division 293 tax. This tax applies when you have an income and concessional super contributions of more than $250,000. Division 293 tax levies 15% tax on taxable contributions above this threshold.

    Tweet
    0
    What is a CGT event?
    When do you need an ABN?

    About the Author

    admin

    You Might Also Like

    • What salary packaging can involve

      What salary packaging can involve

    • Advantages and disadvantages of home reversion

      Advantages and disadvantages of home reversion

    • What you need to know about the transfer balance cap

      What you need to know about the transfer balance cap

    • Review your supers investment options

      Review your super’s investment options

    No Comments

      Leave a Reply Cancel Reply

      You must be logged in to post a comment.

      Recent Posts

      • Responding to difficult employees
      • Things that you should not include in a will
      • The pre-mixed investment options that are available to you
      • What salary packaging can involve
      • Spotting unauthorised and mistaken transactions

      Archives

      • March 2021
      • February 2021
      • January 2021
      • December 2020
      • November 2020
      • October 2020
      • September 2020
      • August 2020
      • July 2020
      • June 2020
      • May 2020
      • April 2020
      • March 2020
      • February 2020
      • January 2020
      • December 2019
      • November 2019
      • October 2019
      • September 2019
      • August 2019
      • July 2019
      • June 2019
      • May 2019
      • April 2019
      • March 2019
      • February 2019
      • January 2019
      • December 2018
      • November 2018

      Categories

      • Business
      • Legal
      • Money
      • People
      • Super
      • Tax
      • Web

      RECENT COMMENTS

        Subscribe & Follow

        Subscribe to our newsletter and keep up to date with the latest news from REM Accounting & Advisory

        REM accounting logo
        • Accounting & Tax
        • Self-Managed Superannuation Funds
        • Business Advisory
        • CFO Advisory

        Association LogoAssociation Logo
        Copyright © 2018 REM Accounting and Advisory | Privacy Policy

        Liability limited by a scheme approved under Professional Standards Legislation