Salary sacrifice means contributing from your before-tax income.
If you choose to salary sacrifice you'll automatically become a Triple S member and your salary sacrifice contributions will be credited to your Triple S Employer Account. If you don’t already have a Triple S account, one will be created for you and you’ll be charged the standard Triple S administration fees on that account. As with all Triple S accounts, you have a choice of investment options for your Triple S balance. Your regular member after-tax contributions will continue to be credited to your Pension Scheme account.
Salary sacrifice and tax
Your salary sacrifice contributions are not considered part of your taxable income, which means your PAYG tax may be reduced. Rather than paying the tax upfront, salary sacrifice contributions will be taxed at the concessional tax rate when you leave Triple S after age 55. This is great news if you’re currently subject to a medium to high level income tax rate.
Salary Sacrifice contributions to Triple S will count towards the concessional contribution cap applied to taxed funds, currently $27,500 per financial year.
High income earners tax
Please note that if the sum of your income and relevant concessionally taxed contributions is over $250,000 per year, you’ll be taxed at 15% of your relevant concessional contributions above the $250,000 threshold. More information is available in the Super SA Division 293 Tax fact sheet and on the ATO website.
There are two ways you can make salary sacrifice contributions to your super:
- arrange to have the contributions deducted from your pay through your payroll office. To do this, download the appropriate salary sacrifice form. A fee of $44 is charged by your employer for commencing or changing salary sacrifice arrangement through your payroll office.
- use a salary sacrifice provider who will handle everything for you, subject to their fees and charges. You can find out more from the Office of the Commissioner for Public Sector Employment.
Things to note
If you salary sacrifice into Triple S, you’re not automatically eligible for the three Standard units of Triple S Death and TPD Insurance. You remain covered by your Pension Scheme insurance, however, you can top it up by purchasing additional voluntary Death and TPD Insurance through Triple S.
Salary Sacrifice contributions will be taken into account when you’re assessed for a range of Commonwealth benefits, including co-contributions, age pension, Family Tax Benefit and Child Support.
Growing your super through salary sacrifice does not entitle you to the Commonwealth Government Co-Contribution or count towards your Pension Scheme standard contribution rate.