Answer Eleven

Well done for thinking about your financial future

We are so excited you chose to embark on your journey with us. You would suit our Discover package with a focus on:

Salary Sacrifice

Salary sacrifice or salary packaging is an arrangement between you and your employer where you pay for some items or services straight from your pre-tax salary.

Depending on your employer you may be able to salary package; computers, cars and superannuation. If you are lucky to be employed by a hospital or charity there may be other benefits that you can salary package.

The greatest thing about salary packaging is for each dollar that you salary sacrifice your net cash flow is only reduced by the amount net of tax, the example below shows the benefit of making a salary sacrifice contribution to super vs an after tax contribution to super:

Via after-tax income Via salary sacrifice
Gross salary $85,000 $85,000
Less salary sacrifice $0 $5,000
Taxable income $85,000 $80,000
Less PAYG tax (including Medicare Levey) $21,097 $19,147
Less after-tax contribution $5,000 $0
Net Salary $58,903 $60,853
Employer SG contribution $8,075 $8,075

ABS data indicates that super was the main source of income for 19% of retirees. Interestingly, 53% of those intending to retire expect super to be their main source of income.


Superannuation, or Super, is money which is saved to fund your retirement. It’s usually a long term investment, saved over your working life. Superannuation has concessional tax treatment, where most of your earnings are taxed at a maximum rate of 15%.

There’s a lot of bad press around super which can make it seem like it’s not worth bothering with or something you worry about in the future. Successive governments just can’t seem to leave it alone but it is still the most tax effective way to save for retirement unless you are already not paying any tax.

For most people, super will eventually be one of your largest assets. It’s a way of saving money while paying a lower amount of tax. While the rules can change, it’s still the best legal way to reduce the amount of tax you can pay. Will the rules keep changing? Based on history; yes and we need to stay on top of these changes.

Superannuation is not the investment itself, it is just the structure your investments are held in. The funds can be invested in almost anything with the use of an SMSF. Traditional investments within super funds are broken up by allocating to a range of assets such as: shares, bonds, property and cash. One thing we hear is that “I don’t like investing in super”. The truth is can’t actually invest in “super”, you invest in assets that are in the tax effective super structure.

Anyone can contribute to a super fund, so long as you are under 65. The most common types of contributions are: Employer contributions – this the minimum amount your employer must pay into your super from your salary (commonly called Superannuation Guarantee, or SG) Salary Sacrifice contributions – these are still employer contributions, but they are in addition to the regular SG contributions. You ‘sacrifice’ part of your salary and have it paid to your superannuation fund instead of to you Personal contributions – these can be either after tax (called non concessional contributions) or before tax (called concessional contributions). The latter ones allow you to claim a tax deduction for the contribution.

There are a few other types of contributions, which we can discuss with you if they are suitable for your personal circumstances.