Double the benefits through salary sacrificing

Because of the way tax is applied to superannuation, savvy employees can turn what would have been a tax liability into extra super by making use of a salary sacrifice arrangement.

Many workers can, by agreement with their employer, have money paid into their super fund from their salary before income tax is taken out.

These before-tax contributions can reduce their tax bill and also boost their super savings.

Amounts directed to a super fund via a salary sacrifice arrangement will be taxed in the hands of the fund at 15%.

These amounts will escape being taxed at your marginal rate, which in most cases will be more than the 15% levied on the super fund.

As an example, Michael earns an annual salary of $90,000 (excluding the super guarantee).

If he makes before-tax contributions to his super fund of $10,000 through salary sacrifice,

“We’re going to do it the other way around: you can invest in anything you like, but if you say not only will he significantly boost his retirement savings but will save $1950 in tax.

This scenario is based on the 2022-23 income year tax rates and Medicare levy of 2%.

Of course, in the no-salary-sacrifice scenario, Michael has higher take-home pay.

But with salary sacrifice there that you’re going to have this social impact, you’ve got to be able to demonstrate it.”

What fund to look for How, then, can you tell what your fund is up to?

Dunnin says its website should disclose what the fund is investing in and its thinking behind it, but make sure it is a good performer.

“All the leading super funds are committed to ESG principles.

“If you look at the ESG investment indexes compared to the regular investment indexes, there’s not much difference.

“But just because a fund is an ESG fund doesn’t make it a good fund.

“The upshot is a super fund isn’t good because it does ESG, but if it’s a good fund it will most likely do its ESG well too.”

VITA PALESTRANT

is less tax and more super – a handy annual boost to Michael’s savings.

He would need to ensure his total super contributions (including the super guarantee) stay under the cap of $27,500.

MARK CHAPMAN, H&R BLOCK

Central Coast Council’s financial performance is continuing to improve, with the financial report presented at the January 24 meeting showing a strong financial position to kick off 2023 and reinforcing Council’s ongoing long term financial sustainability strategy.

Council CEO David Farmer said the organisation’s financial performance continues to exceed planned forecasts.

“As reported at Council’s December 2022 meeting, and reinforced at last night’s meeting, our strong financial performance means that we can allocate surpluses to pay down some debt earlier than originally forecast and set aside funds for future needs, while we continue to prudently manage other financial challenges such as rising costs due to inflation,” Farmer said.

Due to the early scheduled timing of the December 2022 Council Meeting, the Financial Report presented at the January 24 meeting was the November 2022 monthly financial report.

The December 2022 monthly financial report will be