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Salary Sacrifice for RetirementYou can arrange for your employer to make additional pre-tax contributions to super. These contributions will be taxed at 15% in the fund, but this is substantially less than the level of tax most people would pay if the money was taken as salary or wages. Salary Sacrifice is a tax-effective means of saving for retirement.
Here is an example of how Salary Sacrifice can help you
Salary | $60,000 | $60,000 | Salary Sacrifice | $0 | $5,000 | Taxable Income | $60,000 | $55,000 | Estimated Tax & Medicare Levy | $12,750 | $11,175 | Super Tax | $0 | $750 | Total Tax | $12,750 | $11,925 | Net Income | $47,250 | $48,075 | Tax Saved | $0 | $825 |
Do it every year and: Approximate value in 5 years time assuming a constant 7% net return: $24,000 Approximate value in 10 years time assuming a constant 7% net return: $60,000 Approximate value in 20 years time assuming a constant 7% net return: $125,000
The above figures are provided for information only purposes and does not nor is intended to be financial advice. We recommend you seek financial advice before proceeding with any investment or contributions. Whilst future returns are quoted after taxes and fees, no returns or capital values are guaranteed. No allowance has been made for additional concessional contributions in relation to concessional contributions limits.
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