Salary sacrifice provides broader opportunities to employees for their retirement and taxation planning. However, there are a number of complexities, which employees should consider as part of their decision-making, and obtaining independent financial advice prior to commencing salary sacrifice is recommended.
Salary sacrifice allows members to direct before tax salary into their NTGPASS member accumulation account. The Territory financed benefit will not alter as the salary used to calculate the final NTGPASS benefit will not be affected (that is, the benefit salary stays the same).
Salary sacrifice contributions will only be accepted for NTGPASS Active members contributing 6 per cent in compulsory member contributions. Members of other defined benefit schemes are also unable to salary sacrifice to those schemes.
To salary sacrifice members arrange with their employer to forgo pre‑tax salary in return for the employer contributing that sacrificed salary into their superannuation fund. Salary sacrifice contributions are made by regular fortnightly payroll deductions and an annual fee is applicable. The payroll section will deduct the fee from pre‑tax salary on commencement of salary sacrifice and then annually at the salary packaging annual review on 1 April. Salary sacrifice forms are available from your payroll section.
A 15 per cent contributions tax is deducted from salary sacrifice contributions upon receipt into the fund. The contributions receive investment earnings relative to the selected investment option and all contributions made after 1 July 1999 are preserved until a condition of release is satisfied.
The changes to the concessional contribution cap are summarised in the table below.
|Age||Cap from 1/7/2014|
|Under age 50||$30 000|
|Age 50 and over||$35 000|
|Age 60 and over||$35 000|
It is proposed as part of the 2016-17 Commonwealth Budget that the concessional contribution caps for all employees will be reduced to $25 000 from 1 July 2017.
Note that the concessional contribution cap includes both employer funded contributions as well as salary sacrifice contributions.
Refer to the fact sheet below or contact the NT Superannuation Office if you require further information. To commence or vary your salary sacrifice contributions, please contact the Salary-Packaging Unit in the Department of Corporate and Information Services on (08) 8999 4481 or by emailing email@example.com.
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Last updated: 10 May 2018