Salary Sacrificing into Superannuation Toowoomba
With Australia’s ageing population and medical advances helping us all to live longer, it’s never been more important to plan for a secure and comfortable quality of life in retirement. The Government provides incentives to encourage Australians to save more towards funding our own retirement and one way is through a salary sacrifice arrangement.
Salary sacrifice is when you make a before-tax contribution to your super. Your employer already contributes some of your pre-tax salary or wages directly into your super fund called the “Superannuation Guarantee”. However, relying on the mandated employer contribution, typically a 9.5% super guarantee, may not be enough to achieve your desired retirement goals. By implementing a strategy like salary sacrifice you can increase your super balance and, at the same time, reduce your income tax.
The key advantage of salary sacrificing is that you’ll be taxed at a maximum rate of just 15% on these contributions and any earnings on these contributions once invested in your superannuation fund and not at your marginal tax rate (which could be as high as 49%). Salary sacrificing is a great way to reach your retirement goals faster and more effectively.