Secondly, under the law, an employer can actually claim salary sacrificed amounts as part of their compulsory 9. That is, as long as the employer contributes 9. Again, relatively few employers would do this, as the quickly-dissatisfied employee would simply cancel the salary sacrifice agreement, and probably start stealing the tearoom biscuits as well.
The main problem with salary sacrifice is the hassle. Basically, an employee needs to organise the sacrifice well before payday. To reduce this extra workload, many employers restrict their employees to one salary sacrifice negotiation per year — which can make it hard to change your mind if things change from month to month.
But there is good news. Things changed on 1 July From now on, almost all tax-paying people can simply make a private, personal contribution into their superannuation fund which they can then claim as a personal deduction when they do their tax return. There is still a little bit of paperwork required between the member and their fund, but the employer does not need to be involved.
This will substantially reduce the hassle of making extra contributions. You have already been paid for June, so it is too late to organise a salary sacrifice arrangement and then use your savings to replace the sacrificed salary.
Instead of salary sacrifice, you can contribute the cash directly into your superannuation fund. You complete a special form and the super fund gives you back an acknowledgement so maybe leaving things until mid-June is a bit late! This paperwork basically tells the fund to pay tax on the extra money because you are claiming a tax deduction for it at your end.
As well as the simplicity, this method also means you are in absolute control. This case study is provided for illustrative and educational purposes only, and the members shown are not real. Additionally, figures may be rounded for ease of understanding. Members should seek advice from a qualified licensed professional, regarding their own circumstances. These figures were calculated using the MoneySmart compound interest calculator accessed 4 November The information should not be used as a guide to future performance of any investment.
Investment returns can be positive or negative and this does not guarantee a future outcome. The total saved does not take inflation into account. Check with your chosen savings product provider in regard to actual interest calculations.
These figures are provided only to demonstrate the principle of compounding. They are not intended to represent projected returns in a QSuper Accumulation account. These figures were calculated using the MoneySmart super contributions optimiser calculator and the MoneySmart compound interest calculator as at 4 November This case study is for illustrative purposes only to show how salary sacrificing works, and does not take into account your personal tax liability.
The calculation is based on tax rates for the financial year and it is assumed for the purpose of the case study that all terms and conditions have been met. You can find out more about financial advice options or contact us. Please enable JavaScript in order to get the best experience when using this site. Personal Employers Advisers. Products Why QSuper. Investment options. Financial advice. Compare us. Why QSuper? More reasons to join. Grow your super Salary sacrifice Super co-contribution Voluntary contributions Spouse contributions Contribution caps Tax deductions.
Consolidate your super. Find your lost super. Changing jobs. Nominate beneficiaries. Early access. Seminars and education. Why retire with QSuper. Decide how much you want to salary sacrifice, how often and when You might want to salary sacrifice on an ongoing basis, or as a one-off. Notify your employer and get any agreement in writing If you can salary sacrifice and you know how much, how often and when you want to do it , contact your payroll team at work to find out what information they need.
Make sure you don't exceed the concessional contributions cap If you do exceed the cap, additional tax and penalties may apply. Are there any other things I should be aware of? The value of your investment in super can go up and down. Before making extra contributions, make sure you understand and are comfortable with any potential risks.
The government sets rules about when you can access your super. Find out about other ways you can contribute into super. Where can I go for more information? Book now. What's next? Get a guide to how much you might need in retirement. Calculate now. You might also like. Oliver's Insights Read more.
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