Grow your super

What are the benefits of salary sacrificing?

Boost your retirement savings

Salary sacrificing can help give your super a boost and can help you reach your retirement goals.
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Reduces your taxable income

Salary sacrificing a portion of your income means that you will reduce your taxable income and may even put you into a lower tax bracket.
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Pay less tax on contributions

You’ll generally pay less tax on salary sacrifice contributions (15%) than your marginal  tax rate which can help you grow your super.

 

There can be a number of benefits to salary sacrificing but it may not be the right choice for everyone. We recommend you speak to a financial adviser when making decisions that could affect your income or your super.

How does salary sacrificing work?

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    Read the transcript  

    Salary sacrificing

    Salary sacrifice is a way of using some of your before-tax earnings to your advantage.

    You might be familiar with using a salary sacrifice arrangement to lease a car or some equipment for your job. But you can also use this method to make extra contributions to your super.

    There are two main benefits to salary sacrificing to super. First, it's an easy way to give you a super boost and help it grow faster. And second, it can help you save on tax.

    Salary sacrificing to your super is something you arrange with your employer. Because it comes out of your salary before you've paid income tax, it's generally taxed as super at 15% and not at your marginal tax rate.

    Depending on your circumstances, salary sacrifice can reduce the overall amount of tax you pay.

    While topping up your super’s a great way to save, and even a little extra today can make a big difference tomorrow, it's important to be aware of the limits (or ‘caps’) the government sets on super contributions. So keep track of your super contributions by logging into your super account regularly. If you're a UniSuper member, checking your account is easy. You can use our award-winning app or log into your account via our website.

    Before you start salary sacrificing, it's important to consider your situation. For example, it could be more effective for you to top up your super with your after-tax income. So it's best to check.

    If you're keen to understand what your options are, why not speak with one of our super consultants? Appointments are available to anyone, online and in-person, at no additional cost, even if you're not a UniSuper member.

    Whatever you decide, with UniSuper, it's easy to imagine a future worth retiring for. Visit unisuper.com.au/salarysacrifice to learn more.

    The information contained in this video is of a general nature and doesn't consider your personal circumstances. Before making decisions, consider the relevant PDS and TMD on our website and your circumstances, and whether to seek financial advice. Investment returns can be positive or negative. Past performance isn’t indicative of future performance. UniSuper Advice is operated by UniSuper Management Pty Ltd ABN 91 006 961 799 (USM), which is licensed to provide financial product advice. USM is also the administrator of the fund UniSuper ABN 91 385 943 850 (UniSuper). UniSuper Limited ABN 54 006 027 121 is the trustee of UniSuper.

What is an example of salary sacrificing?

Salary sacrifice infographic
Based on Australian resident tax rates for the 2024-25 financial year. This example is for illustrative purposes only and is not intended to provide or suggest a guarantee on outcome. The actions that are appropriate for an individual will depend on their personal circumstances.

*Including the Medicare levy

How to set up salary sacrifice super contributions

If you decide that making salary sacrifice contributions to your super is right for you, it’s easy to set up.
  • 1. Contact your employer
    Have a chat with your employer’s payroll team and confirm that your workplace offers this scheme. 

    If not, you can still make after-tax voluntary contributions to your super.
     
  • 2. Nominate a portion of your pay

    Think about how much of your income you’d like to direct to your super account before you’re paid.

    You can decide to salary sacrifice a one-off payment or at a frequency that you’re comfortable with.

  • 3. Document your agreement
    Once you’ve decided the amount you’d like to salary sacrifice and how often, you and your employer must sign a document that states the terms of the agreement.

    This can help in case there are any disputes later down the track.
     
  • 4. Don't exceed the concessional contribution cap
    From 1 July 2024, the concessional contributions cap is $30,000 per year. 

    This is the maximum amount of before-tax contributions you can typically   make to your super each year without being subject to extra tax. 

    For more information on the concessional contributions cap, visit the ATO.
     

What’s the difference between salary sacrifice and voluntary super contributions?

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Salary sacrifice super contributions

A salary sacrifice is a before-tax super contribution that is taxed at 15% which is generally lower than your income tax rate.

As a salary sacrifice super contribution is deducted from your pay before you receive it as income, this could also help you to reduce the amount of tax you pay on your income. 

You can make a one-off salary sacrifice super contribution or decide to make regular contributions by agreement with your employer.

Voluntary super contributions

A voluntary super contribution is an after-tax super contribution and can be made to your super account (or your spouse’s super account) from your take-home pay. 

A voluntary contribution may also be known as a non-concessional contribution, a personal contribution, or an after-tax contribution.

You can make a voluntary super contribution by paying directly into your super account through your super fund.
 

Join UniSuper and look forward to a greater retirement 

With competitive fees and strong long-term returns*, we’re an award-winning super fund that is passionate about creating greater retirement outcomes for our over 647,000# members across Australia. 

#As at 30 June 2024

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Frequently asked questions

The information is of a general nature and doesn't consider your personal circumstances. Before making decisions, you should consider the PDS and TMD on our website, and whether the information is appropriate for your circumstances otherwise seek financial advice.

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