Salary Sacrificing

Salary Sacrificing is an option more and more employers are offering employees at all levels of the organisation.

What is it?

In simple terms, it is when an employee decides to decrease their gross salary in return for a non-cash benefit such as a vehicle, superannuation, health insurance, or even school fees. Both the employer and employee must agree to this arrangement.

Adjustments must be made before personal income tax is deducted. For example, if salary sacrifice contributions were being made in the form of Superannuation payments, the employer would pay the salary sacrifice contributions directly into the employee's superannuation account BEFORE personal income tax has been paid.

The Benefits:
  • You could reduce your personal income tax.

The Pitfalls:

  • There are both effective and ineffective forms of salary sacrificing.
  • If sacrificing to Superannuation, a superannuation surcharge may apply.
  • Employer superannuation contribution may be effected.
  • FBT will be incurred on some forms of salary sacrificing.
  • Need to be mindful of keeping non-sacrificed wages above industrial Awards.
  • Your employer may not agree.

If you are interested in salary sacrificing, come in and see one of our staff to discuss your individual needs.

If you would like further information, please contact us on 02 4926 4522 or email your enquiry to


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