Salary sacrifice sounds like a ridiculous idea. After all, you are already paying taxes, your utility bills, your children's education, and lots of other things, which is why setting aside funds for salary sacrifice might even sound impossible.
But the truth is that you can also do it, if you know exactly how salary sacrifice works and how you can make the process a lot easier. That is what this article is all about. In the following paragraphs, we will share with you a few basic things about how salary sacrifice works, how you can make the most out of it, and how you can ensure that you will enjoy its benefits. If you're ready, then let's get started:
- Salary sacrifice benefits you and your employer. You make a salary sacrifice when you put aside a portion of your salary for your super or other benefits, and which your employer will match. This benefits you since this can, for example, help increase your super contributions, while your employer enjoys tax deductions in the process.
Aside from your super, you can also make a salary sacrifice towards car fringe benefits, payments for your children's education, and the like.
- Seek professional help before making a salary sacrifice. You need to know a few important details when making a salary sacrifice, including concessional contribution caps and how much you will contribute. That is where your financial advisor will come in. It is best that you seek his advice first so that you will be guided accordingly on how your salary sacrifice will affect you and your finances.
- Put the details into writing. Because it involves money, it is also important that you put the details of your salary sacrifice with your employer into writing. This will help clarify what each party's responsibilities are, how much each party will have to contribute, and how the funds will be used, among other things. All in all, the document will help keep your funds safe and secure.
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