Contribution options

Salary-sacrifice contributions

Salary sacrifice to superannuation is an arrangement between an employee and an employer where the employee has superannuation contributions deducted from their salary before tax is deducted.

These contributions are treated as employer contributions and attract the Commonwealth Government's 15% contributions tax on entry to the scheme. This means the amount you contribute needs to be increased (or grossed up) by an amount representing the contributions tax, so that the same net contribution to PSS is made as an after-tax contribution.

How to calculate your salary sacrifice contribution amount

To calculate your salary sacrifice contribution amount, simply divide your 6% compulsory after-tax contribution amount by 0.85. For instance, if you currently contribute $4,200 to PSS in after-tax contributions, you would need to increase this amount to $4,941 via salary-sacrifice contributions (that is, $4,200 ÷ 0.85 = $4,941). You need to arrange this grossing up of your contributions with your employer as part of your salary packaging arrangements.

Whether salary sacrifice is right for you depends on your individual circumstances. An easy-to-use calculator on the STC website shows the effect of making salary sacrifice contributions, after-tax contributions or a combination of both. Alternatively, we recommend you seek professional financial planning advice.

Is salary sacrifice right for you?

Whether salary sacrifice is right for you depends on your individual circumstances. There is an easy-to-use calculator on our website that shows the effect of making contributions via salary sacrifice, after-tax contributions or a combination of both. Alternatively, we recommend you seek professional financial planning advice.

Note: State Super Financial Services Australia Limited, trading as StatePlus, is the holder of an Australian Financial Services Licence 238430, ABN 86 003 742 756. StatePlus is a ‘for profit’ financial services organisation which also provides financial planning advice. As of 6 June 2016, StatePlus is wholly owned by FSS Trustee Corporation (ABN 11 118 202 672 and AFSL 293340) as trustee of the First State Superannuation Scheme (ABN 53 226 460 365). StatePlus has its own Board and Management team. State Super does not pay any fees to StatePlus for the financial advice and member seminar services it provides to State Super members. State Super is not a representative of StatePlus and receives no commission when making referrals to StatePlus for financial planning services. Neither State Super nor the New South Wales Government take any responsibility for the services offered by StatePlus, nor do they or StatePlus guarantee the performance of any service or product provided by StatePlus.