Issued September 2015
Salary
Salary Sacrifice
Sacrifice
Issued 12 December 10
Grow your super
and pay less tax
What is salary sacrifice?
Salary sacrifice is an arrangement with your
employer to pay part of your gross (before-tax) pay
directly into your super account.
This is known as a concessional contribution and it can
help grow your super while reducing your personal
income tax.
Personal contributions – what’s the difference?
Personal (non-concessional) contributions are paid
into your super from your after-tax pay. If you earn less
than $50,454 p.a.* you may be eligible for the
government co-contribution.
To learn more, read our Money for Nothing brochure
available from lucrf.com.au or call us on 1300 130 780.
Super tip
Rollover to help boost your super!
If you’re like most Australians, you may have
more than one super account and be paying
more than one set of fees. This eats away your
retirement savings.
Combining all your super into one LUCRF Super
account can help to give your super an extra
boost. It’s a lot easier than most people think!
Read more in our Rollover brochure available at
lucrf.com.au or by calling us on 1300 130 780.
*
Total annual income amount includes assessable income, fringe benefits and
reportable super contributions for the income year.
A little each pay does add up
By salary sacrificing a little amount each pay, you can
boost your super considerably without the need to
budget for a large annual ‘one-off’ contribution.
Tax savings
The super contribution tax rate is generally 15% on salary
sacrifice payments and is less than most people’s
individual income tax rate (between 34.5% and 47%,
including Medicare Levy).
For further details regarding contribution tax levels please
visit www.ato.gov.au/super or call 13 10 20.
Salary sacrifice at a glance
The table below shows how salary sacrificing from your
gross pay (before-tax) can add to your super.
Salary
sacrifice
weekly to
super
Decrease in
weekly take
home pay
Annual
Income
tax saving
$30
$19.65
$538.00
$517,056
$575,572
$75
$48.96
$1,354.00
$517,056
$663,345
$125
$80.96
$2,290.00
$517,056
$760,870
$175
$112.96
$3,226.00
$517,056
$858,396
Super at age Super at age
67 without
67 with
salary sacrifice salary sacrifice
Assumptions: 30 years of age, $25,000 in super, $70,000 annual income, Employer
SG contribution of 9.5% increasing to 12% from 1 July 2022, 7% p.a. investment
earnings, $1.50 per week administration fee, 0.69% investment management fee,
$156 p.a. insurance premium and 3% inflation p.a.
How much can you salary sacrifice?
The total concessional contribution limit is currently
$30,000 p.a. for people aged under 50 and $35,000 p.a.
for people aged 50 and over. Any excess concessional
contributions will be included in an individual’s assessable
income and include a penalty charge due to the Australian
Tax Office (ATO) not receiving the tax as early as they
would have if it had been received as income tax.
Please note: your concessional contributions limit
includes your employer Superannuation Guarantee (SG)
and salary sacrifice contributions.
Request for payroll deduction
w
Hand this form to your payroll department
If your employer allows additional contributions to be deducted from your before or after-tax pay,
please complete this form and then hand directly to your payroll department.
Step 1 Employer details
LUCRF Super membership number (if known)
Company payroll number (if known)
Employee name (name of member)
To the pay office (company name)
I authorise you to deduct the following amount of superannuation contribution from my pay and remit to LUCRF Super
Step 2 Contribution before-tax (salary sacrifice)
Step 3 Contribution after-tax (personal contribution)
Salary sacrifice
Personal contribution
Please commence my before-tax contribution of
Please commence my after-tax contribution of
%
%
$
or
Using the following pay frequency
Weekly
Fortnightly
Monthly
Commencing from this future pay date (dd/mm/yyyy)
/
$
Using the following pay frequency
Weekly
Fortnightly
Monthly
Commencing from this future pay date (dd/mm/yyyy)
/
/
or
/
EMPLOYER TO NOTE: After-tax contributions are required (by legislation) to be paid
within 28 days of the end of the month in which they are deducted.
Step 4 Authorisation
This authority is effective until further notice from me.
Member signature
7
Date (dd/mm/yyyy)
/
/
If you need help completing this form, please call us on 1300 130 780 or email [email protected]
080.45
Issued September 2015 by L.U.C.R.F Pty Ltd ABN 18 005 502 090 AFSL 258481 as Trustee for Labour Union Co-operative Retirement Fund
ABN 26 382 680 883 (LUCRF Super).
How to start
salary sacrificing
Complete the attached ‘Request for payroll deduction’ form
and hand it directly to your employer’s payroll department.
Your employer can also pay personal contributions
directly into your LUCRF Super account from your
after-tax pay. If you would like to do this, complete
Step 3 of the attached form.
Your employer will notify LUCRF Super of the
contribution type and amount when making your
superannuation payments.
Important things to know about salary sacrifice
• Salary sacrifice arrangements are not available to
everyone as not all employers will offer the option.
If you are paid under an Award, you may not be
able to sacrifice your salary to a level below what is
stipulated in your Award.
• Tax treatment of salary sacrifice (before-tax)
contributions is different to that of personal super
contributions (after-tax), therefore it may not suit
your circumstances.
• When making a decision, ask your employer which
gross pay amount they will use to calculate your
SG contributions – will it be before or after your
salary sacrifice has been deducted?
Example: If you gross $50,000 p.a. and salary
sacrifice $5,000 p.a., your employer may pay your
SG contribution on $45,000 instead of the $50,000
you are earning. Ask your employer for clarification.
• If you are aged between 65 and 75 years, you
will need to meet the work test conditions (which
requires that you work a minimum of 40 hours in a
continuous 30-day period during the financial year)
to make either personal or salary sacrifice
contributions to your super. If you are aged 75
or over, you are not eligible to contribute.
Call 1300 130 780 and talk to a qualified
LUCRF Super representative for personalised
financial advice.
How salary sacrificing
can pay off
More super
Salary sacrificing can make a big difference to your
super balance when it is time to retire.
Example of super savings on retirement:
Retire with over
$195,000 more
by salary sacrificing
$722,205
minimum
employer SG
contribution +
$100 per week
salary sacrifice
David
• Is 30 years old
• Plans to retire at 67
• Has a current account
balance of $25,000
• Has an annual income
of $70,000, and
$527,153
minimum
employer SG
contribution
only
• Salary sacrifices $100
per week
Assumptions: Employer SG contribution of 9.5% increasing to
12% from 1 July 2022, 7% annual investment earnings, 0.69%
investment management fee, $1.50 weekly administration
fee, $156 p.a. insurance premium and 3% inflation p.a.
The above projection is meant as an estimate only and is not intended to be kept
or used for practical purposes. Actual outcomes will depend on a range of factors
outside the control of LUCRF Super. It is not intended to be used as a substitute for
professional financial advice.
Less tax
The money you salary sacrifice into your super comes
directly from your gross (before-tax) pay. Generally this
money is taxed at the super contribution tax rate of 15%
upon entry into your fund instead of your normal income
tax rate (could be up to 47%, including Medicare Levy).
Contact LUCRF Super
1300 130 780
lucrf.com.au
E [email protected]
P PO Box 211 North Melbourne VIC 3051
Privacy
Protecting your personal information is important to us. We collect,
use, disclose and protect your personal information in accordance
with our Personal Information Collection Statement and the Privacy
Policy. Please read these documents at lucrf.com.au/privacy or by
calling 1300 130 780.
If you do not wish to receive direct marketing and educational
material please contact us by phone, email or post.
Disclaimer
This brochure is issued September 2015 by L.U.C.R.F Pty Ltd
ABN 18 005 502 090 AFSL 258481 as Trustee for Labour Union
Co-Operative Retirement Fund ABN 26 382 680 883 (LUCRF Super).
LUCRF0102_0815
The information provided is general in nature only and has been
prepared without taking into account your personal financial situation,
objectives or needs. You should assess your personal financial situation
before making a decision. To help you decide we recommend you read
our current Product Disclosure Statement (PDS). You can download this
from our website or request a copy by calling us.