Salary sacrifice into your GESB Super account
You can choose to give up or ‘sacrifice’ part of your before-tax salary and have it paid into your GESB Super account instead. This is generally a tax-effective way to grow your super1.
To start salary sacrifice contributions, you need to set up a contractual agreement with your employer, called a salary sacrifice arrangement.
Your concessional contributions cap
GESB Super is an example of a taxed fund. The general concessional (before-tax) contributions cap is currently $27,500 per financial year2.
You’ll pay more tax on any contributions over the amount of your cap
If you reach your cap and still make contributions to your super, then you may have to pay extra tax.
Carry forward concessional contributions
From 1 July 2019, the carry-forward rules allow you to make extra concessional contributions above the general concessional contributions cap. If you have a total super balance of less than $500,000 on 30 June of the previous financial year, you can 'carry forward' any unused concessional contributions cap amounts from previous financial years, starting 1 July 2018. Unused cap amounts that have not been used after five years will expire.
For example, the general concessional contributions cap in the 2018/19, 2019/20 and 2020/21 financial years was $25,000. It is $27,500 for 2021/22 and 2023/24. If you made $15,000 of concessional contributions in each of 2018/19, 2019/20, 2020/21 and 2023/24, you will have $42,500 of unused cap amounts in 2023/24 that you can use to make concessional contributions above the general concessional contributions cap, provided your total super balance at the end of 30 June 2022 was less than $500,000.
GESB Super example: meet Ross
Here’s an example of how salary sacrifice and its tax benefits work. Ross’s annual salary is $70,000. He makes a personal contribution of $5,200 a year ($100 a week) to his GESB Super account.
Comparing super contributions with and without salary sacrifice
The table below shows the differences between contributions made from Ross’s after-tax income (without salary sacrifice) and contributions made from his before-tax income (with salary sacrifice).
No personal super contribution | Without salary sacrifice | With salary sacrifice | |
|---|---|---|---|
| Gross (before-tax) salary | $70,000 | $70,000 | $70,000 |
| Salary sacrifice | $0 | $0 | $5,200 |
| Taxable income | $70,000 | $70,000 | $64,800 |
| Less income tax (including Medicare Levy) | $14,617 | $14,617 | $12,7953 |
| After-tax income | $55,383 | $55,383 | $52,005 |
| After-tax personal contribution | $0 | $5,200 | $0 |
| Total take-home pay | $55,383 | $50,183 | $52,005 |
| Net amount added to Ross’s super | $0 | $5,200 | $4,4204 |
| Total benefit (income plus super) | $55,383 | $55,383 | $56,425 |
Please note: the figures above are for the 2023/24 financial year. The example used in this document is for illustrative purposes only.
After arranging salary sacrifice contributions with his employer:
- Ross has contributed $5,200 to his super without reducing his after-tax income by the same amount. This is because he has only paid income tax on $64,800 instead of $70,000.
- Over the year, Ross’s tax has reduced by $1,822 ($14,617 minus $12,795), and his take-home pay has only reduced by $3,378 ($55,383 minus $52,005)
- Ross has reduced his income tax by about $35 a week ($1,822 divided by 52 weeks) with his $100 a week contribution to super. At the same time, his take-home pay has only reduced by about $65 a week ($3,378 divided by 52 weeks)
- Ross has increased his total benefit (net income plus super) by $1,042 ($56,425 minus $55,383)
- This includes the 15% contributions tax on the salary sacrifice amount
The cost of salary sacrifice depends on your provider
You can usually salary sacrifice directly to your GESB Super account at no cost through your employer’s payroll system, if this is in line with your employer’s agreement.
If your salary sacrifice is arranged through a third-party salary packaging provider, they may charge a fee.
It’s easy to arrange salary sacrifice
You should first check with your employer to confirm what arrangements they have for salary sacrificing to your super. They should be able to arrange for your super contributions to be deducted from your before-tax salary.
You can also download and complete our PDF form and give it to your employer.
If you would like to go through a salary packaging provider, simply contact them for help with setting up your salary sacrifice arrangement.
Finding the right advice
There are a number of factors to take into account when deciding whether to start salary sacrifice contributions. You might want to seek advice for your personal circumstances from a qualified financial adviser.
If you want to sacrifice more than 50% of your total employment cost5 into your GESB Super account, the WA State Government requires you to get financial advice to help you make an informed decision.
See our range of services and tools to help you manage your super.
1 If you are a high income earner whose adjusted taxable income and low tax contributions exceed $250,000 then you may be liable for Division 293 tax. It applies to both GESB Super and West State Super members.
2 For the 2023/24 financial year. The concessional contributions cap is indexed annually in line with Average Weekly Ordinary Time Earnings in increments of $2,500 rounded down.
3 Includes low income tax offset of $28.
4 Salary sacrifice contributions are generally taxed at the concessional rate of 15%.
5 Your total employment cost is made up of your base salary, other cash allowances, non cash benefits, any fringe benefits tax liabilities currently paid by your employer and any variable components. You should talk to your employer if you need to confirm the value of your total employment cost.
More information
- Find out more about GESB Super and tax
- Get started with the how to salary sacrifice page
- Learn more about contribution caps
Need help
- Find out more about financial advice
- Call us on 13 43 72
Thank you for printing this page. Remember to come back to gesb.wa.gov.au for the latest information as our content is updated regularly. This information is correct as at 19 April 2024.