Salary sacrifice

Salary sacrifice means you can ‘sacrifice’ part of your before-tax salary to your super account, instead of having it paid to you as a salary. This is generally a tax-effective way to grow your super account.

You can salary sacrifice to your GESB Super or West State Super account if you’re currently employed in the WA public sector.

It’s easy to get started

To start salary sacrifice contributions, you’ll need to set up a contractual agreement with your employer (called a salary sacrifice arrangement).

You can complete our payroll deduction form, submit it to your employer and they will send your contributions directly to us on your behalf. If you already have another type of salary sacrifice set up, simply contact your salary packaging provider for details on how to set up salary sacrifice for your super.

How to salary sacrifice

Your take home pay with and without salary sacrifice

Salary sacrifice is a great way to grow your super

Here are some reasons you might decide to salary sacrifice:

  • You’ll pay less income tax
  • Your taxable income is reduced by the amount you salary sacrifice, which means you could pay less income tax.
  • There could be other tax benefits
  • Super is generally taxed1 at what’s known as a concessional rate of 15%. If you compare this to your marginal tax rate, your total benefit (i.e. net income plus super) could increase through salary sacrificing. Of course, this tax benefit depends on your personal circumstances.
  • Salary sacrifice is flexible
  • You can easily start, stop or change your salary sacrifice contribution amount as your situation changes.
  • It’s cost-effective
  • You can generally salary sacrifice contributions at no cost into your GESB account through your employer, if you are a WA public sector employee.

See how salary sacrifice works with your account

Salary sacrifice rules, including contribution caps, are different depending on whether you have a taxed GESB Super account or an untaxed West State Super account.

If you’re in our defined benefit Gold State Super account, you are subject to your Maximum Contribution Rate.

Here are some examples to highlight how salary sacrifice could work with your account:

Start by checking with your employer

When you’re working out the best way to add to your super, check with your employer to confirm what salary sacrifice arrangements they have.

If you only want to salary sacrifice directly to your super account, you can usually do this at no cost through your employer’s payroll system, if this is in line with your employer’s agreement.

Your employer should be able to arrange for your super contributions to be deducted from your before-tax salary.

You can also use our payroll deduction form.

If you would like to go through a salary packaging provider you or your employer already use, simply contact them for help setting up your salary sacrifice arrangements. You may be charged a fee by the provider.

How to salary sacrifice

Understand your salary sacrifice arrangement

Most of the time, salary sacrificing doesn’t affect the amount your employer contributes to your account.

In some cases, employer Superannuation Guarantee (SG) contributions could be calculated on your reduced salary and your salary sacrificed amount may count towards your employer’s SG obligations. This depends on the details of your salary sacrifice arrangement, so make sure you understand the terms of your arrangement.

Find out if salary sacrifice is right for you

Salary sacrifice is a great way to grow your super but there are a number of factors to consider first.

To contribute extra to your super, you need to be under the age of 65 or, if you are between 65 and 75, you must have worked at least 40 hours in a period of 30 days in the current financial year.

Salary sacrifice may not be the best option for you if your taxable income is likely to fall under the tax-free threshold. You need to consider the tax rates appropriate to your annual taxable income.

If you want to know more specific information around your unique situation, such as how much to sacrifice, you may want to get professional advice from a qualified financial adviser.

Get help managing your super

Other important things to know

Before you make a decision to salary sacrifice to your super, it's important to understand:

  • Once you add money to super, you generally can’t access it until you meet what’s known as a condition of release, e.g. when you retire
  • It’s important to find out how your super will be taxed
  • Salary sacrifice is a type of contribution you make before tax (when you make after-tax contributions, tax has already been paid so no further tax applies to these contributions)
  • Salary sacrifice contributions don’t count towards the Commonwealth Government Super Co-contribution
  • The amount you salary sacrifice will be reported by your employer on your PAYG payment summary - this amount could affect whether you’re eligible for:
    • The spouse super contributions tax offset
    • A deduction for personal super contributions
    • All dependant tax offsets
    • Centrelink and Child Support Agency benefits (e.g. family tax benefit, child care benefit)

For more details, read about salary sacrificing for your type of super account.

1 West State Super and Gold State Super are untaxed schemes. Tax is generally only payable when you access your benefit, or when you roll over to a taxed scheme or retirement income stream. For more information, read the Tax and super brochure.

Need help

Page last updated 19 March 2019