Salary sacrifice may be something that you have already heard of, but do you really know what it means? More importantly, do you know if it could be the right choice for your financial planning?
In our animation, we consider the tax-effective and wealth accumulation benefits of entering into a salary sacrifice arrangement with your employer.
It is important to note that everyone’s financial situation is different, so the benefits of salary sacrifice (as well as the arrangements offered by your employer) will differ from person to person. While salary sacrificing into super is a tax effective way to build your retirement nest egg, you should consider your net cash flow and any other arrangements you currently have in place.
In addition, there are other super strategies available also such as co-contribution, spouse contribution or superannuation contribution splitting. Note, from 1 July 2017, you may be able to make personal tax deductible superannuation contributions in addition to or instead of salary sacrificing.
It may be a good idea to talk to your adviser if you wish to explore salary sacrifice to understand the ‘ins and outs’ of the strategy. We are always here to help you.