Because pre-tax superannuation amounts are taxed at only 15% (rather than at your marginal tax rate) your additional superannuation contributions will be 'cheaper' than if you paid them from your own pocket.

Eligibility

Please check your salary packaging eligibility by clicking here.

Things you need to know

• Salary packaged superannuation contributions can only be paid to your own superannuation account (they cannot be paid to a spouse account).
• A contribution tax of 15% applies to pre-tax super and is normally collected by the superannuation fund directly from the contribution amount.
• The Australian Taxation Office sets annual pre-tax contribution limits each financial year (1 July to 30 June).  These limits apply to amounts contributed by your employer under the Superannuation Guarantee Scheme as well as salary packaged superannuation amounts.
• In the 2017/18 financial year the superannuation concessional contribution limit is $25,000.
• If you exceed the annual limit, your contributions will be taxed at your marginal rate (with a credit for the 15% already paid on the way in).
• Certain funds, including those available to government employees, may allow you to exceed these superannuation contribution limits without penalty. Speak to a financial adviser to find out more.
• Salary packaged superannuation contributions generate a Reportable Superannuation Amount (RSA) which will be reported on your annual Payment Summary and which may affect other statutory or legal entitlements and obligations, including HELP/HECS repayments and Child Support (see below for more details).

Reportable superannuation amounts

Packaging superannuation will result in a Reportable Superannuation Amount (RSA) on your annual PAYG Payment Summary.

RSAs do not affect your income tax liability but the ATO will take them into account when determining certain other obligations and entitlements.  For more information in this regard please visit the ATO website.

It is particularly important to note that if you have a HECS/HELP debt it is likely that your repayment schedule will be affected by the RSA arising from salary packaging superannuation.  If you do have such a debt please refer to the further information below.

Reportable superannuation amounts and your HECS/HELP Loan

Your HECS/HELP repayments are based upon your ‘HELP Repayment Income’, which includes any Reportable Superannuation Amount (RSA).

By default, your employer does not take RSAs into account when calculating your periodic HECS/HELP deductions throughout the income tax year.  This means that if you lodge an annual tax return containing an RSA you could be faced with an additional lump-sum HECS/HELP payment requirement when you receive your ATO notice of assessment for the relevant year.

To avoid this, you can complete a Withholding declaration – Upwards variation form and provide it to your employer so that additional HECS/HELP deductions can be taken throughout the year. To calculate the amount of HECS/HELP to be withheld, follow these steps:

1. Calculate your taxable salary by deducting the amount you intend to package towards superannuation (plus any other pre-tax salary packaged amounts) from your gross salary.
2. Calculate your RSA: i.e. RSA = Amount of superannuation packaged.
3. Calculate your HECS/HELP Repayment Income (HRI) by adding together your taxable salary (from step 1) and your RSA (from step 2).

Refer to the ATO HECS repayment tables to find your HECS/HELP repayment rate. Record this rate in the relevant section of the Withholding declaration – Upwards variation form and provide it to your employer.

How to start packaging superannuation

1. Choose the fund you wish to contribute to or, if you don’t have one, set one up.

2. If you’re a current Smartsalary customer, set up your super packaging online or via our mobile website and upload a copy of your super fund statement.

3. If you’re not already a Smartsalary customer then you will need to sign up for salary packaging via the Smartsalary website or mobile website and then set up your super packaging online or via our mobile website.

We’ll get your employer to set aside the amount you choose from your pre-tax salary. We then arrange for that money to be paid directly to your superannuation fund.