When you think about the phrase ‘salary sacrifice’, it doesn’t exactly sound financially positive – however salary sacrificing can be an excellent way to maximise the value out of every dollar you earn. That’s because salary sacrificing reduces your pre-tax income and, therefore, the amount of tax you pay – and let’s face it, who wants to pay the ATO any more than they’re obliged to? Also commonly referred to as salary packaging and total remuneration packaging, as a contractor with the Ayers Group, you can use salary sacrificing arrangements to acquire work-related items, such as portable electronic devices, computers and tools of your trade. However, you’ll probably get the greatest long-term advantage by sacrificing part of your salary to grow your superannuation fund. So for instance, you may earn $100,000pa and have an arrangement whereby an extra $10,000 a year comes out of that and gets contributed to your compliant superannuation fund. You will never see the $10,000 in your pay packet… and your annual tax liability will be calculated on the remaining $90,000. What’s more, the salary you’ve sacrificed to super will generally be taxed concessionally, as a superannuation contribution, at just 15% in the super fund. What this all means is, if you are happy to reduce your pay packet by a little (it doesn’t have to be as much as $10k) then you will effectively earn thousands of more dollars every year – effectively supercharging your super! There are other opportunities for salary sacrifice arrangements, like purchasing cars, and property (e.g. goods, land and buildings, and shares or bonds), and covering expense payments, such as loans, school fees, and child care. However, these items are described by the ATO as ‘fringe benefits’, which means they will attract a fringe benefits tax (FBT) – talk to your accountant before you make a decision. Don’t Delay the Conversation You can discuss salary sacrificing at any time so why wait?! Once you’ve finalised your arrangement, the Ayers Group’s customised payroll solution can manage the processing of your salary sacrifice and provide accurate reporting to ensure your compliance with ATO obligations. To find out more about how you can benefit from salary sacrificing, call an expert at The Ayers Group today.