What is it?
Salary Sacrifice is a simple technique whereby a nominated amount of pre-tax salary can be directed straight into a designated Superannuation fund. Salary Sacrifice can also be used for a motor vehicle, if required.

How it can benefit you:
By making pre-tax contributions to a Super fund, significant tax savings are possible. As contributions to Super funds are generally taxed at lower rates than most marginal rates, large savings can be generated. As the contributions come off your gross salary, this also has the effect of potentially lowering your marginal tax rate. This can then other potential payments such Capital Gains Tax and income tax on dividends.

Considerations:
As super contributions are locked away until retirement, when considering this strategy, a detailed analysis must be completed to determine accurately the level of disposable income that is being earned and can be comfortably contributed.

Also when used for a vehicle, fringe benefit tax is applicable and will need to be assessed.

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