If you are considering making contributions to your superannuation through a salary sacrifice arrangement, we recommend that you seek personal financial advice to ensure that it is the correct decision for you. Following are some possible implications you may wish to discuss:
Amounts paid into superannuation through salary sacrifice, such as the salary sacrificing of your performance pay, must be reported on your Income Statement as Reportable Employer Superannuation Contributions (RESC).
Although this RESC amount will not be included in your taxable income, RESC is included in the income tests for benefits and obligations administered by the Australian Taxation Office (ATO), Child Support Agency and Centrelink.
Please refer to the ATO (www.ato.gov.au) for more information.
Salary sacrifice and employer contributions to your superannuation are classified as concessional contributions. There is a limit on the amount of concessional contributions that can be paid in respect of an individual per financial year. The limit for the current financial year can be found on the ATO's Key superannuation rates and thresholds page.
If your contributions exceed the cap, the amount will be include in your assessable income and taxed at your marginal tax rate. You will also have to pay the excess concessional contributions (ECC) charge. If you are a member of the UniSuper Defined Benefit Division your cap with include a Notational Taxed Contributions (NTCs) which must be obtained from UniSuper.
For further information about your concessional contribution cap, or your NTC for the current financial year, please contact your super fund. UniSuper members can contact Member Services on 1800 331 685 or visit the UniSuper website at www.unisuper.com.au.