HomeBlog › Package your super and pay less tax

Package your super and pay less tax

Package your super and pay less tax

Package your super and pay less tax!

Superannuation is your savings for your retirement. While the Government will be gradually increasing the super guarantee payments made by your employer on your behalf from 9.5 per cent to 12 per cent by 2025, these contributions alone may not be sufficient to support your retirement lifestyle. There are, however, strategies that can help you boost your super savings.

Salary sacrificing not only helps to boost your superannuation savings but reduces the amount of tax you pay as well.

Lower tax on contributions and earnings

To encourage Australians to save more for their retirement, superannuation enjoys a concessional rate of tax. Contributions to, and earnings within, super are taxed at just 15 per cent.

By making regular salary sacrifice contributions to super you'll only pay the concessional rate of tax on the amount that goes into super and your taxable income will be reduced by the amount you sacrifice. So, you'll not only increase your retirement savings, but you will pay less in tax as well.

Are there any restrictions on a salary sacrificing strategy?

As a result of the generous tax concessions that apply to super contributions, there are limits on the level of contributions you can make. Concessional contributions (those contributions attracting 15 per cent tax) include your employer's superannuation guarantee contributions as well as any salary sacrifice contributions you choose to make, and are limited to $25,000 per year.

For low income earners with an adjusted taxable income of up to $37,000 you may be eligible for the Low Income Superannuation Tax Offset (LISTO) from the Government. The LISTO refunds back to your superannuation account the 15 per cent contributions tax you pay on your SG contributions and any salary sacrifice contributions you make.

Low or no tax once retired

When you convert your super into a retirement income stream you benefit from paying low or no tax. If you are 60 or over, all payments made from a taxed super fund will be tax-free.

Other super strategies

Two other strategies that you could consider in conjunction with salary sacrificing are the Government super co-contribution and contributing to a super fund for your spouse.

How to get started

Before you take up salary sacrificing or any other superannuation strategy, seek professional advice; a financial adviser can help to develop a super strategy that suits your situation.


For more information please contact us.

The material and contents provided in this blog are informative in nature only.  It is not intended to be advice and you should not act specifically on the basis of this information alone.  If expert assistance is required, professional advice should be obtained.