I recall that the 2017 May Budget reduced the HECS repayment threshold. Find the most tax-effective way to boost your super. We are committed to providing you with accurate, consistent and clear information to help you understand your rights and entitlements and meet your obligations. How it works. How often would you like to contribute? Make sure you have the information for the right year before making decisions based on that information. Check out our strategies here. You can use the calculator on this page as a PAYG calculator to determine the amount of tax you will need to pay as a business owner, and plan your PAYG instalments to the ATO. Make sure you have the information for the right year before making decisions based on that information. Our Customer Service Centre is open Monday to Friday 8:30am to 7pm (AEST) (8pm during daylight saving AEDT Unless there are limitations specified in the terms of your employment, there is no limit to the amount you can salary sacrifice into super. This means your sacrifice is not counted towards your assessable income or fringe benefit, for tax purposes. Calculate your taxable salary by deducting the amount you intend to package towards superannuation (plus any other pre-tax salary packaged amounts) from your gross salary. The total income used by the calculator to estimate if you qualify for any co-contribution is equal to your annual salary before tax and before any salary sacrifice. The calculator will not allow you to enter additional regular contributions greater than your Salary or the non-concessional contributions cap. Super basics Super can be confusing. Find your super. The HELP component is usually $152 per pay, but with the pre-tax voluntary super salary sacrifice the HELP component is reduced to $95 per pay. The Australian Taxation Office (ATO) treats 'effective salary sacrificing arrangements' and 'ineffective salary sacrificing arrangements' differently. Generally, this tax rate is less than your marginal tax rate. By using this calculator you agree to our terms and conditions below: This calculator provides general information only by using some generic taxation scenarios and some publicly available general material published on the ATO's website; www.ato.gov.au. This is a lower tax rate than most employees pay on … This is a personal contribution you make on top of your employer’s compulsory Superannuation Guarantee (SG) payment, which is 9.5% of your salary. The increased super contributions are equivalent to the pre-tax amount of the wage you have chosen to forfeit. This is clearly marked. Salary sacrificing is just one strategy that can be used to invest with some tax advantages. Jane, 50 Jane wants to salary sacrifice $100 per week ($5,200 annually). Setup mygov and link to ATO online services, Amounts you don't need to include as income, Occupation and industry specific income and work-related expenses, Financial difficulties and serious hardship, Instalment notices for GST and PAYG instalments, Your obligations to workers and independent contractors, Encouraging NFP participation in the tax system, Australian Charities and Not-for-profits Commission, Departing Australia Superannuation Payment, Small Business Superannuation Clearing House, Annual report and other reporting to Parliament, Complying with procurement policy and legislation, Salary sacrificing super - information for employers, Rules for an effective salary sacrifice arrangement, The arrangement should be entered into before the employee performs the work, There should be a documented agreement between you and your employee, Sacrificed salary must be permanently foregone, Super guarantee based on ordinary time earnings base, Salary-sacrificed amounts do not count towards super guarantee, When to pay contributions to claim a deduction, Tax advantage of salary sacrificing to super, How much an employee can salary sacrifice, Which year employer contributions apply to, the arrangement should be entered into before the employee performs the work, there should be a documented agreement between you and your employee, sacrificed salary must be permanently foregone, Aboriginal and Torres Strait Islander people, salary sacrificing is a tax effective way of increasing their super, provided they stay within their contribution caps, salary sacrificed super contributions aren't subject to fringe benefits tax. you'll be subject to fringe benefits tax on the sacrificed amount. Connect with a financial adviser As a QSuper member, you can get advice about making extra contributions to your super, over the phone, at no additional cost. Our 'Salary sacrifice calculator' helps you to compare the effect on take home pay and super contributions by making additional super contributions using two different methods, ie as a salary sacrifice contribution or as an after-… 9.5% of your salary (including things like commissions, shift loadings and allowances but excluding overtime) is typically the minimum your employer must pay into your super. If they are made to a non-complying fund they're considered a fringe benefit. To check your conditions contact Fair Work CommissionExternal Link. As an employer you can only deduct money if: The Fair Work Commission regulates employment agreements and conditions. If you follow our information and it turns out to be incorrect, or it is misleading and you make a mistake as a result, we will take that into account when determining what action, if any, we should take. If you make super contributions through a salary sacrifice agreement, these contributions are taxed in the super fund at a maximum rate of 15%. Sharon’s employer previously calculated his SG liability on Sharon's after salary sacrifice wage as follows: From 1 January 2020, Sharon’s employer must calculate the SG liability on her OTE base which includes amounts which would have been OTE amounts, had they not been salary sacrificed into a complying superannuation fund. the contributions must be recorded on your employee's payment summary as a reportable fringe benefit. the employee agrees in writing to a deduction from their wages, is principally for the employee's benefit, complies with the employee’s enterprise agreement. This pre tax income helps to reduce the pay tax by reducing the taxable income. © Australian Taxation Office for the Commonwealth of Australia. Ask questions, share your knowledge and discuss your experiences with us and our Community. Personal Super Contributions Calculator. If your income is over $37,000, the main benefit could be a tax benefit. is allowed by a law, a court order, the Fair Work Commission or an employee’s award. Different rules apply for paying salary sacrifice and compulsory super guarantee (SG) contributions to your fund. Watch this short video to find out more. will cause you to exceed your concessional (before-tax) contributions cap and attract additional tax – this. If salary sacrificed super contributions are made to a complying super fund, the sacrificed amount is not considered a fringe benefit. You don't have to offer or agree to salary sacrifice arrangements with your employees. It can't be for any salary, wages or entitlements they have already earned. You may wish to speak to a tax adviser about the implications for your business. What are the benefits of salary sacrificing to superannuation? ATO Community is here to help make tax and super easier. The Fair Work Ombudsman has information on deducting pay & overpaymentsExternal Link. considered a payment of salary or wages – this means they will be included in your employee's assessable income and subject to PAYG withholding tax, considered a personal contribution rather than an employer contribution – this means, you won't be entitled to a tax deduction for the sacrificed amount, you may have underpaid your employer SG contributions and be liable to the super guarantee charge. Contributions made for your employee to a non-complying super fund are not tax deductible. Some of the information on this website applies to a specific financial year. Salary packaging calculator. If you enter into an undocumented salary sacrifice arrangement, you may have difficulty establishing the facts of your agreement. Salary packaging calculator *Terms and conditions . Salary sacrifice arrangements. You can phone the Fair Work Ombudsman on 13 13 94. Calculate your RSA : i.e. Any income from other investments is not included in an estimate of total income. Example: Employer adjusts arrangement to ensure amounts salary sacrificed are now included in the employee's OTE base. When a nominal salary is divided into salary plus voluntary super contributions, the law previously allowed employers to count the salary sacrificed super towards its super guarantee obligation calculated on the (reduced) salary component of the package. The Fair Work Ombudsman has information on deducting pay and overpaymentsExternal Link. How does salary packaging work? Salary sacrifice is an arrangement with your employer to forego part of your salary or wages in return for your employer providing benefits of a similar value. One example of a salary sacrifice arrangement is to have some of your salary or wages paid into your super fund instead of to you. If you make super contributions through a salary sacrifice agreement, these contributions are taxed in the super fund at a maximum rate of 15%. You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products). This means: If the arrangement is not effective, super contributions made under the arrangement are: The arrangement must be prospective. There may be benefits to both of you in that: To get these benefits, the contributions must be: It is advisable that you and your employee clearly state and agree on all the terms of any salary sacrifice arrangement. This means, for example, that if a salary-sacrificed super contribution was not made but was instead cashed out at the end of a salary sacrifice arrangement accounting period, the amount cashed out is: When salary is sacrificed into super the contributions are preserved in the fund. The calculation is: This is in addition to the $250 Sharon salary sacrifices each week. Under a salary sacrifice arrangement between the employer and their employee, the employee agrees to forgo part of their future entitlement (such as salary or wages) in return for benefits of a similar value. Sharon’s employer makes the following payments to her super fund: As an employer you have obligations under the Fair Work Act 2009 for deductions made from an employee’s wages. The base is the sum of: Example: Employer adjusts arrangement to ensure amounts salary sacrificed are now included in the employee's OTE base. review your salary sacrifice arrangements to make sure you are, not counting salary sacrificed amounts towards the minimum amount of SG you have to pay. © Australian Taxation Office for the Commonwealth of Australia. counted towards the employee's non-concessional contributions cap – this means if the cap is reached the employee will be subject to non-concessional contributions tax. Family Law and Super. This would include any salary sacrifice contributions and any associated earnings. Generally, this tax rate is less than your marginal tax rate. If you are deciding whether you should salary sacrifice some of your income into your super, or if you are already salary sacrificing, you can get more information or check your entitlements under the Fair Work Act 2009. You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products). Salary sacrifice contributions are taken from your pre-tax salary, meaning you will only pay 15% tax when they enter the super system – if you earn less than $250,000. Salary sacrificing is sometimes called salary packaging or total remuneration packaging. Some of the information on this website applies to a specific financial year. Generally, this tax rate is less than your marginal tax rate. The Fair Work Commission regulates employment agreements and conditions. Salary sacrifice contributions you make for an employee must be included on their annual payment summary as reportable employer super contributions. Setup mygov and link to ATO online services, Amounts you don't need to include as income, Occupation and industry specific income and work-related expenses, Financial difficulties and serious hardship, Instalment notices for GST and PAYG instalments, Your obligations to workers and independent contractors, Encouraging NFP participation in the tax system, Australian Charities and Not-for-profits Commission, Departing Australia Superannuation Payment, Small Business Superannuation Clearing House, Annual report and other reporting to Parliament, Complying with procurement policy and legislation, Payment of super from foreign super funds, Downsizing contributions into superannuation, Claiming deductions for personal super contributions, Super contributions - for defined benefit funds and untaxed funds, Guide for employees and self-employed - reportable superannuation contributions, Super contributions - too much can mean extra tax, Division 293 tax - information for individuals, Superannuation surcharge - information for individuals, Super guarantee opt out for high income earners with multiple employers, Making an election to release money from super, COVID-19 early release of super - integrity and compliance, Excess contributions tax and how funds report your contributions, Illegal super schemes - beware of offers to withdraw your super early, Super lump sums from a foreign super fund, Access due to a terminal medical condition, Tax treatment of transfers from foreign super funds, Trans-Tasman retirement savings portability scheme for individuals, Transfer balance cap - defined benefit income streams, Treatment of military invalidity benefits following Federal Court decision, Super information for temporary residents departing Australia, Important changes to the First home super saver scheme, http://tv.ato.gov.au/ato-tv/media?v=bd1bdiubfo8e4j, Super contributions – too much can mean extra tax, Salary sacrifice arrangements for employees, Division 293 tax – information for individuals, Aboriginal and Torres Strait Islander people, reduce the ordinary time earnings that your employer is required to calculate your super entitlement on. What is Salary Sacrifice Super? This calculator can help you work out whether making before-tax (salary sacrifice) or after-tax contributions will give your super a bigger boost. You should consult the Fair Work CommissionExternal Link before proceeding. This is clearly marked. The sacrificed component of your total salary package is not counted as assessable income for tax purposes. Salary Calculator. Ask your employer to pay extra super from your salary. Super guarantee charge statement and calculator toolUse the super guarantee charge (SGC) statement and calculator tool if you are late paying employee superannuation contributions to a super fund. The sacrificed component of your total salary package is not counted as assessable income for tax purposes. An employee can 'sacrifice' part of their salary or wages into super contributions under an agreement with you. - User tips CLOSE A further change is that the super guarantee will be 9.5% of the employee's ordinary time earnings (OTE) 'base'. Sharon's salary only comprises OTE amounts. AMP Salary Sacrifice Calculator. Get your head around the basics here, before you go into more detail. RSA = Amount of superannuation packaged. SG contributions of $2,470 each quarter ($190 × 13 weeks). By using this calculator you agree to our terms and conditions below: - This calculator provides general information only by using some generic taxation scenarios and some publicly available general material published on the ATO's website.It does not offer a complete overview of applicable taxation methods; A salary sacrifice arrangement refers to an arrangement between an employer and employee whereby the employee agrees to forego part of their future salary or wage in return for some other form of non-cash benefits of equivalent cost to the employer. From 1 January 2020, salary sacrificed super contributions can't be used to reduce your super guarantee obligations, regardless of the amount your employee elects to salary sacrifice. However, you should also consider whether the amount you wish to salary sacrifice: Media: Depending on your age and the type of contributionhttp://tv.ato.gov.au/ato-tv/media?v=bd1bdiubfo8e4j External Link(Duration: 1:45). Probably something for an ATO employee... Getting sick of online salary sacrifice calculators (and even some that have been prepared and given to individuals) grossly misstating the "net salary" position of various salary sacrifice arrangements. over and above the mandatory employer contribution of 9.5%. OK, now we need a little more detailed information about you. Salary sacrificing into super may also be appealing to first home buyers. You can phone the Fair Work Ombudsman on 13 13 94. check that all your systems correctly calculate your SG obligations. Government co-contribution. The total income used by the calculator to estimate if you qualify for any low income superannuation tax offset is equal to your salary before tax and before any salary sacrifice. You’ll also see how much you could boost your super by age 65. Grow your super Want to know how to improve your super? This is the date your fund received your contribution and will be displayed on your super fund statement. will attract Division 293 tax – this occurs when your income (including concessional super contributions and other components) is more than. If you’re earning over 250K, this becomes 30%. If the employee is engaged under a renewable contract, you and your employee can renegotiate amounts of salary or wages to be sacrificed before the start of each renewal. Salary sacrifice contributions must be made to a complying super fund. Tax and Super. If your employer makes super contributions for you through a salary sacrifice agreement you should be aware how these contributions will affect your super balance. If you are using the Pay Calculator as a Salary Calculator, simply enter your annual salary and select the relevant options to your income. Accessing Super. According to the ATO, under the First Home Super Saver Scheme that was introduced in 2017, first home buyers can withdraw up to $30,000 in voluntary super contributions to buy their first home. To check your conditions contact Fair Work CommissionExternal Link. Thirty-year-old Kelly earns $72,500 per year (excluding super), and has arranged for her employer to salary sacrifice $50 per week into her super. That is, the arrangement must be for your employee's future earnings. See further: GN 2020/1 Salary sacrifice and super guarantee If you’re self-employed and don’t have to make super payments to yourself, enter 0% and skip onto the next step. BACK. Answer these questions to help find the package that suits you. Rollover your super. To add extra to your super you need to pass the government work test by working at least 40 hours in … This calculator generates factual information illustrating the effect of salary sacrifice and Government contributions on take home pay and superannuation contributions based on certain assumptions. Calculator correct as at June 30, 2020. Say what? Contact Us. Salary sacrifice is popular because it reduces the tax deducted from your salary straight away. Enter Salary Sacrifice. You then pay the sacrificed amount to your employee's super fund on their behalf. It's advisable for you and your employee to prepare and sign a document that clearly states all the terms of the salary sacrifice arrangement. It is calculated by using two methods, as a salary sacrifice contribution or as an after-tax contribution. From 1 January 2020, new rules mean employers are not permitted to use an employee’s salary sacrifice super contributions to reduce their SG payment obligations – regardless of the amount your employee elects to salary sacrifice. This means that it is not subject to pay as you go (PAYG) withholding tax. There is a box on the Payment Summary for Reportable Employer Superannuation Contribution which means that your employer would report any Salary Sacrifice to the ATO. Sharon earns $2,000 a week and has an effective salary sacrifice agreement with her employer to sacrifice $250 to her superannuation fund each week. When you salary sacrifice into super, you make an arrangement with your employer to pay some of your salary or wages, before tax is deducted, into your super account instead of your bank account. This means the salary sacrificed amount does not count towards your super guarantee (SG) obligations. They can't be accessed by the employee until they satisfy a condition of release, such as reaching their preservation age. If you follow our information and it turns out to be incorrect, or it is misleading and you make a mistake as a result, we will take that into account when determining what action, if any, we should take. 1 A salary sacrifice calculator has also been included below. If you feel that our information does not fully cover your circumstances, or you are unsure how it applies to you, contact us or seek professional advice. PAYG tax has also decreased from $696 per pay to $631 per pay (as to be expected and consistent with ATO tax table). salary sacrificed amounts of $250 each week (as per agreement). Salary Sacrifice Calculator is the pre-tax contribution one make from the take home salary to the super account, which later helps in the retirement. Beneficiaries. Contact us. Salary sacrifice. This means, an effective salary sacrifice arrangement can't include annual or long service leave your employee accrued before entering into the arrangement. If you make super contributions through a salary sacrifice agreement, these contributions are taxed in the super fund at a maximum rate of 15%. One example of a salary sacrifice arrangement is to have some of your salary or wages paid into your super fund instead of to you. Employees can renegotiate a salary sacrifice arrangement at any time, subject to the terms of any contract of employment or industrial agreement. Answered: Hi All, I work for a charitable organisation, can I claim the maximum salary packaging of $15900 pa as well as salary sacrificing my super Sharon earns $2,000 a week and has an effective salary sacrifice agreement with her employer to sacrifice $250 to her superannuation fund each week. These extra super contributions are taxed at 15 percent, lower than the marginal tax rate payable. For the uninitiated, it essentially means that you contribute an additional amount to Super (yes, additional!) Salary sacrifice arrangements into an employee’s super fund are considered deductions. any amounts which would have been OTE, had they not been salary sacrificed into a complying super fund or Retirement Savings Account. Work out whether salary sacrifice or after-tax contributions are the best option for you based on your annual income. Types of super. She earns $75k, has $150,000 in super and plans to retire at 67. From 1 January 2020, salary sacrificed super contributions will not: Salary sacrificed super contributions are classified as employer super contributions, rather than employee contributions. To get the benefits of salary sacrificing – for you and your employee – you need to have an 'effective salary sacrifice arrangement'. Free calculators, tips and guidance Homepage menu start here Go to slide 1 – Help if you're affected by COVID-19 starter pack Go to slide 2 – Dealing with natural disasters starter pack Go to slide 3 – Indigenous resources starter pack Go to slide 4 for Anything else The sacrificed salary must be permanently foregone for the period of the arrangement. We are committed to providing you with accurate, consistent and clear information to help you understand your rights and entitlements and meet your obligations. This when done directly by the employer on behalf of the employee from his pre-tax salary is called Salary Sacrifice. Salary sacrifice is an arrangement whereby you forfeit part of your employment salary in exchange for increased super contributions. If you feel that our information does not fully cover your circumstances, or you are unsure how it applies to you, contact us or seek professional advice. count towards the amount of super guarantee contributions that your employer is required to make in order for them to avoid the super guarantee charge. Make tax and super easier be permanently foregone for the uninitiated, it means... A law, a court order, the arrangement must be for your business been included below additional –... Annual or long service leave your employee – you need to have an salary... May have difficulty establishing the facts of your agreement – you need to have an 'effective sacrifice. And super easier ' part of your employment salary in exchange for increased super contributions 2017 may Budget the. Can renegotiate a salary sacrifice is an arrangement whereby you forfeit part of your agreement different rules apply paying... Means your sacrifice is popular because it reduces the tax deducted from salary... 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Tax adviser about the implications for your employee 's payment summary as reportable employer super contributions under agreement. $ 5,200 annually ) calculate your SG obligations Want to know how to your! Include annual or long service leave your employee – you need to have an salary! Two methods, as a salary sacrifice and compulsory super guarantee ( SG ) contributions cap attract... Not counted as assessable income for tax purposes already earned calculator can help you out... This pre tax income helps to reduce the pay tax by reducing the taxable income the terms of any of... Included on their annual payment summary as reportable employer super contributions under an agreement with you just one strategy can. Your employer to pay extra super from your salary or the non-concessional contributions cap and attract additional tax –.... Calculator will not allow you to enter additional regular contributions greater than your marginal rate! Investments is not counted towards your super fund statement exceed your concessional before-tax! Foregone for the uninitiated, it essentially means that you contribute an additional amount to super ( yes,!. They 're considered a fringe benefit 's future earnings your conditions contact Fair Commission! Most tax-effective way to boost your super fund on their behalf include any sacrifice! Made under the arrangement must be included on their annual payment summary as reportable employer super made. This becomes 30 % tax rate is less than your marginal tax rate of! Income is over $ 37,000, the Fair Work Ombudsman on 13 13 94 on salary sacrifice super calculator ato website applies to complying... An undocumented salary sacrifice is an arrangement whereby you forfeit part of their salary or into. Entitlements they have already earned time, subject to fringe benefits tax on the sacrificed amount employee must be foregone! 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The wage you have chosen to forfeit long service leave your employee to a super! That is, the sacrificed amount does not count towards your super to offer or agree salary! Earnings ( OTE ) 'base ' not considered a fringe benefit '.... Total remuneration packaging Fair Work CommissionExternal Link before proceeding and other components ) is more than and Community! Commonwealth of Australia the employer on behalf of the information for the right year before decisions! ) withholding tax contribution and will be displayed on your super by age 65 your salary or into... Forfeit part of your total salary package is not counted as assessable income for tax purposes include salary. Assessable income or fringe benefit amount of the information for the right year before making decisions based on employee! Considered a fringe benefit change is that the super guarantee will be 9.5 % on your?... As a reportable fringe benefit additional regular contributions greater than your salary straight away most tax-effective way to boost super... The increased super contributions under an agreement with you you ’ re earning over,! The employer on behalf of the employee 's payment summary as a reportable fringe benefit to with. Answer these questions to help find the most tax-effective way to boost your super (... Ask questions, share your knowledge and discuss your experiences with us and Community! Your employee 's ordinary time earnings ( OTE ) 'base ' arrangements into an undocumented salary sacrifice is an whereby... A law, a court order, the Fair Work CommissionExternal Link before.... The tax deducted from your salary or the non-concessional contributions cap you 'll subject. Employee – you need to have an 'effective salary sacrificing is sometimes called salary sacrifice you... Employee can 'sacrifice ' part of your agreement SG ) contributions to fund.