Salary sacrifice to grow your super

When you work hard for your money, you want to make sure your money is working hard for you. Salary sacrificing may be an effective way to add more to your super using tax to your advantage.

Salary sacrificing might sound complicated but it is worth getting your head around. Salary sacrificing may help you have more money in your super and save you money on your tax that could make a difference to your financial wellbeing.

How it works

Salary sacrificing is a method of diverting part of your salary into your super before you are charged any income tax.

The amount you sacrifice from your pay is an extra amount into your super that is on top of your employer’s compulsory super contribution.

Because the sacrificed amount comes from your pre-tax income, the amount going into your super is only taxed at 15%¹ instead of your marginal tax rate² (which could save you as much as 30% in tax³ depending on your assessable income).

It can be a great way to put extra money into your super and save on tax.⁴

Benefits of salary sacrifice

Pay less tax

If you earn more than $45,000 per year, you pay less than your normal tax rate (up to 45% + 2% Medicare Levy) on salary sacrifice contributions (15%, or 30% if you earn more than $250,000).

Reduce your taxable income

Salary sacrificing from your before-tax salary lowers your taxable income. So you could pay less tax, or use it as part of your transition into retirement.

Grow your retirement savings

Any extra contributions you make now create a big difference to how much you end up with, as they grow because of compound interest.

Keep your goals on track

Make smart decisions with the help of a professional financial adviser.*

Find out more

*Deciding what is best for you will depend on your personal circumstances and you may want to seek personal financial advice to get the most from your superannuation. You can find out more about financial advice options at qsuper.qld.gov.au/advice

1. If your adjusted earnings (this is your income for surcharge purposes plus your concessional contributions, less reportable super contributions and excess concessional contributions) is more than $250,000 a year extra tax may apply – see the Personal Contributions Guide for more information.
2. Unless you exceed your concessional contributions cap.
3. Plus applicable levies, such as 2% Medicare levy.
4. Some limits apply when it comes to how much you can add to your super, and you will be charged extra tax if you exceed them. Salary sacrifice contributions are included in your concessional contributions. Your concessional contributions cap for the 2021-22 financial year is $27,500.
5. RemServ and Smart Salary are the salary packaging administrators for most Queensland Government employees and they charge a fee to administer the salary sacrifice service. Some major employers have decided to handle their own salary sacrifice arrangements. If you’re in doubt, check with your pay office.