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One of the smarter ways to contribute to your super is through salary sacrifice contributions.

With salary sacrifice contributions, you choose to give up or ‘sacrifice’ part of your before-tax salary and pay it directly to your super account. These contributions are in addition to the Super Guarantee (SG) contributions that employers are generally required to make on your behalf.

You benefit from salary sacrifice contributions in two ways.

First, they can help you grow your super more quickly over time.

Second, you may be able to save tax:

With some of your salary going into super, you’ll lower your taxable income which could help you avoid paying higher rates of tax.
You also pay just 15% tax on your contribution into your super (provided your adjusted taxable income is below $250,000) – if you’re a middle to high income earner, this is likely to be less than the tax you pay on your income.
Salary sacrificing can also help you save for your first home with the First Home Super Saver (FHSS) Scheme. The Scheme allows you to withdraw any voluntary contributions you make along with the associated earnings – up to a limit – to help you purchase your first home.

ASIC's MoneySmart website has a calculator to help you see what your pay and super might look like with salary sacrifice.

Salary sacrifice contributions are organised by your employer on your behalf – so first check that your employer can facilitate salary sacrifice contributions. If yes, you can make salary sacrifice contributions to your super from your future salary, any bonuses you might receive, and other salary-based allowances.

If your employer can’t salary sacrifice for you, then you may want to consider making after-tax contributions.

Salary sacrifice – grow your super, while saving tax