SUPERS027 Salary sacrifice vs personal contributions to super (533 words)

This article discusses the differences between making pre-tax (salary sacrifice) and post-tax (tax deductible) contributions to super. It uses a case study to explain the potential differences.

If you are an employee, there are two ways in which you can optimise the tax-effectiveness of your additional super contributions:

•    opt for a salary sacrifice arrangement, whereby your employer makes additional superannuation contributions beyond the compulsory superannuation guarantee (SG) amount from your pre-tax earnings and reduces your salary accordingly; or
•    make a personal contribution and claim a tax deduction when you submit your tax return.