Salary sacrifice is adding some money from your before-tax pay into your super, which means you’re potentially paying less tax and keeping more of your hard-earned money for you.
Even the cost of a daily coffee, which you might not miss today could add up over time.
OWN THE POTENTIAL
A potentially more comfortable life in the future plus a potential tax advantage right now. Here’s how:
- Tax savings: Pre-tax contributions (such as salary sacrifice) made to your super are only taxed at 15%1, which can be a lot less than the marginal tax rate of up to to 47%2.
- The compound effect: Any returns on your super will be compounded over the years, boosting your balance even more. Earnings within super are also taxed at a minimum of 15%.
- Minimal impact on life now: Because you choose the amount you contribute3, it doesn’t have to cost you much now.
- Maximum impact on your future: Adding to your super regularly could help you enjoy a bigger slice of life in the years to come.
SETTING IT UP IS EASY
1. Where your earnings (including pre-tax contributions) exceeds $250,000, an additional 15% tax will
apply to some or all of your pre-tax contributions.
2. Marginal tax rate of 45% plus 2% Medicare levy.
3. Concessional (pre-tax) contributions are limited to $25,000 in a financial year. This amount includes your employer super guarantee payments and any personal contributions for which you claim a tax-deduction. If you go over this amount, additional tax applies.
Tax considerations are general and based on present tax laws and may be subject to change. Colonial First State Investments Limited is not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and you should seek independent, professional tax advice from a registered tax agent or registered tax (financial) adviser before making any decision based on this information or if you intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that could arise under a taxation law.
Colonial First State Investments Limited ABN 98 002 348 352, AFS Licence 232468 (Colonial First State) is the issuer of the FirstChoice range of super and pension products from the Colonial First State FirstChoice Superannuation Trust ABN 26 458 298 557. This document may include general advice but does not take into account your individual objectives, financial situation or needs. You should read the relevant Product Disclosure Statement (PDS) carefully and assess whether the information is appropriate for you and consider talking to a financial adviser before making an investment decision. A PDS for Colonial First State’s products is available at colonialfirststate.com.au or by calling us on 13 13 36.