Do your employees want to ‘turbo boost’ their super savings with salary sacrifice?
Making additional contributions to super while still working can make a massive difference to retirement savings, and it doesn’t have to be a big financial burden along the way – for you or your employees. Just like any good savings approach – setting a goal and getting into the habit of regularly putting a little extra away is the key.
Salary sacrifice is one option
As an employer, you may choose to offer salary sacrifice arrangements to your employees.
Salary sacrifice is where an employee chooses to have you pay some of their salary into super instead of taking the money as after-tax pay. The salary ‘sacrificed’ is paid directly into super before income tax is deducted, and that could mean they pay less tax overall.
The technical term for this is a ‘concessional contribution’, and salary sacrifice is popular because it can be a tax effective way to make extra contributions to super – these contributions are taxed at 15%, which could be lower than the employees personal marginal tax rate.
Most accounting software packages allow for salary sacrifice arrangements, and your contribution processes can easily be adjusted for these payments.
If you would like to learn more, you can talk to your accountant (if you have one), or simply contact our Business Relationship team.