While there is a sacrifice or reduction in take home salary, the important part of salary sacrifice is the saving for retirement and the added bonus of a lower-taxed environment. The tax is 15%, where-as tax on income over $18,201 is now taxed at 19% and higher as your total income for the year increases, up to 45% plus the Medicare levy.
Watch the concessional-contribution caps, which are ones where they are claimed as a tax deduction (eg an employer) as concessional contributions include salary sacrifice. The current cap 2012-2013 is $25,000, or $50,000 for people over 55. See ATO site.
Let’s illustrate the calculationsTaxable Marginal Salary Marginal Tax (@15%) Net Tax Income Tax Rate Sacrifice Tax if in Super $15,000 0% $5000 $0 $750 $750 paid $20,000 19% $5000 $950 $750 $200 saved $85,000 37% $5000 $1850 $750 $1100 saved
If your taxable income is less than $18,000 then non-concessional (personal, after tax) contributions and the Government Co-Contribution as better than salary sacrifice. Sometimes a combined salary sacrifice and personal contribution may have advantages.