Salary sacrifice to your GESB account

West State Super example: meet Amanda

Here’s an example of how salary sacrifice and its tax benefits work. Amanda’s annual salary is $70,000. She makes a personal contribution of $5,200 a year ($100 a week) to her West State Super account.

Comparing super contributions with and without salary sacrifice

The table below shows the differences between contributions made from Amanda’s after-tax income (without salary sacrifice) and contributions made from her before-tax income (with salary sacrifice).

Comparing Amanda's super contributions with and without salary sacrifice

No personal super contribution

Without salary sacrifice
(from after-tax income)

With salary sacrifice
(from before-tax income)

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) $15,1673 $15,1673 $13,3454
After-tax income $54,833 $54,833 $51,455
After-tax personal contribution   $0 $5,200 $0
Total take-home pay $54,833 $49,633 $51,455
Net amount added to Amanda’s super $0 $5,200 $5,2005

Total benefit (income plus super)

$54,833$54,833$56,665

Please note: the figures above are for the 2018/19 financial year.

After arranging salary sacrifice contributions with her employer:

  • Amanda has contributed $5,200 to her super without reducing her after-tax income by the same amount
  • This is because she has only paid income tax on $64,800 instead of $70,000.
  • Over the year, Amanda’s tax has reduced by $1,822 ($15,167 minus $13,345), and her take-home pay has only reduced by $3,378 ($54,833 minus $51,455)
  • Amanda has reduced her income tax by about $35 a week ($1,822 divided by 52 weeks) with her $100 a week contribution to super
  • At the same time, her take-home pay has only reduced by about $65 a week ($3,378 divide by 52 weeks).
  • Amanda has increased her total benefit (net income plus super) by $1,822 ($56,665 minus $54,833)
  • Amanda’s salary sacrifice contributions are not taxed at the time they are made to her West State Super account6, so the full amount of her contributions are invested in her account
  • Tax will only be need to be paid on her untaxed benefit when it is paid to her, or rolled over to a taxed fund or retirement income stream.

For more information visit the West State Super and tax page.

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 2018/19 financial year, indexed annually in line with Average Weekly Ordinary Time Earnings, in increments of $5,000 rounded down. The untaxed plan cap applies for each untaxed scheme you are a member of.
3 Includes low and middle income tax offset ($530).
4 Includes low income tax offset of $28 and low and middle income tax offset of $530 (total tax offset $558).
5 West State Super is an untaxed fund and generally no contributions tax is applied. Instead, there is a lifetime limit (referred to as an untaxed plan cap) of $1.480 million per super fund for the 2018/19 financial year (indexed annually) which applies to the untaxed benefit. This is the amount of taxable component - untaxed element that can be paid or rolled over to a taxed fund and still be subject to concessional tax treatment.
6 If you are a high income earner whose income and relevant concessionally taxed contributions exceed $250,000 then you may be liable for Division 293 tax. For more information see the Tax and super brochure.

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).

Comparing Ross's super contributions with and without salary sacrifice

No personal super contribution

Without salary sacrifice
(from after-tax income)

With salary sacrifice
(from before-tax income)

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) $15,1673 $15,1673 $13,3454
After-tax income $54,833 $54,833 $51,455
After-tax personal contribution   $0 $5,200 $0
Total take-home pay $54,833 $49,633 $51,455
Net amount added to Ross’s super $0 $5,200 $4,4205

Total benefit (income plus super)

$54,833$54,833$55,875

Please note: the figures above are for the 2018/19 financial year.

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 ($15,167 minus $13,345), and his take-home pay has only reduced by $3,378 ($54,833 minus $51,455)
  • 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 ($55,875 minus $54,833)
  • This includes the 15% contributions tax on the salary sacrifice amount.

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 2018/19 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 and middle income tax offset ($530). 
4 Includes low income tax offset of $28 and low and middle income tax offset of $530 (total tax offset $558).
5 Salary sacrifice contributions are generally taxed at the concessional rate of 15%.

Gold State Super example: meet Julie

Here’s an example of how salary sacrifice and its tax benefits work. Julie’s annual salary is $60,000 and she currently contributes 5% ($3,000) a year to her Gold State Super account.

Comparing super contributions with and without salary sacrifice

The table below shows the differences between contributions made from Julie’s after-tax salary (without salary sacrifice) and contributions made from her before-tax salary (with salary sacrifice).

Comparing Julie's super contributions with and without salary sacrifice

Without salary sacrifice
(from after-tax income)

With salary sacrifice
(from before-tax income)

Gross (before-tax) salary $60,000 $60,000
Salary sacrifice $0 $3,000
Taxable income $60,000 $57,000
Less income tax (including Medicare Levy) $11,6174 $10,5735
After-tax income $48,383 $46,463
After-tax personal contribution   $3,000 $0
Total take-home pay $45,383 $46,463
Net amount added to Julie’s super $3,000 $3,0004

Total benefit (income plus super)

$48,383$49,463

Please note: the figures above are for the 2018/19 financial year.

After arranging salary sacrifice contributions through her employer:

  • Julie’s taxable income has been reduced by $3,000 to $57,000
  • Her salary sacrifice contributions to her Gold State Super account are not included in her assessable income.
  • Julie’s total benefit (net income plus super) has increased by $1,080 a year ($48,383 minus $49,463)
  • Julie’s salary is still $60,000 a year for the purpose of calculating her Gold State Super benefit
  • Julie’s salary sacrifice contributions are treated as employer contributions. Gold State Super is an untaxed fund, so no tax is deducted when the contribution is made
  • Julie will pay tax when she withdraws her benefit, or rolls it over to a taxed fund or retirement income stream.

For more information visit the Gold State Super and tax page.

1 In some circumstances, it is possible to increase your contribution rate above 5%, for example, if you are a Police Officer, a Magistrate or an Industrial Commissioner (as defined in the State Superannuation Regulations 2001), or when you have taken Recognised Unpaid Leave and you chose not to pay any contributions. For more information, please read the Gold State Super essentials brochure.
2 There is a tax on contributions for very high income earners. It applies to concessional contributions, including those made to tax-exempt constitutionally protected funds like Gold State Super. For more information visit the Gold State Super tax page.
3 For the 2018/19 financial year, indexed annually in line with Average Weekly Ordinary Time Earnings, in increments of $5,000 rounded down. The untaxed plan cap applies for each untaxed scheme you are a member of.
4 Includes low income tax offset of $100 and low and middle income tax offset of $530 (total tax offset: $630).
5 Includes low income tax offset of $145 and low and middle income tax offset of $530 (total tax offset: $675).
6 The figure is based on the 2018/19 financial year.
7 As the additional contribution will be paid into GESB Super, a taxed fund, contributions tax is applied at the time the contribution is made.

Page last updated 06 November 2018