If there are no limitations specified in the terms of your employment, there is no limit to the amount you can salary sacrifice.
However, when salary sacrificing super contributions you must consider how the amount of your contributions will affect the amount of tax you pay in your fund.
Salary sacrificed contributions to your super fund form part of the concessional contributions in the fund. Concessional contributions are included in the assessable income of your fund and are taxed at 15%. However, there is a cap on the amount of concessional contributions for each person for each income year. If you have contributions to more than one super fund, all contributions will be added together.
Concessional contributions also include:
your employer’s contributions under the super guarantee
any additional contributions your employer makes on your behalf.
Your concessional contributions cap depends on your age and the year in which the contributions are made.
Financial year
Under 50 years old
50 years old or over
2009-10 and onwards
$25,000
(indexed annually)
$50,000
(not indexed)
This is a transitional cap and ceases on 30 June 2012.
2008-09 and 2007-08
$50,000
$100,000
To avoid paying a higher rate of tax on your super contributions, you should ensure that your salary sacrificed amount and any other concessional contributions to your super fund, such as additional employer super guarantee payments or employer payments above the super guarantee, do not exceed the cap amount.
Subscribe
