When it comes to your retirement, it’s the little things that make a big difference – from what you save, to what you contribute. Learn about how you can contribute more to your super here.
You don’t have to contribute extra to super, however doing so may be a good idea as your retirement savings may need to last you 20 years or longer. Even small regular amounts can have a big impact on your retirement over a long investment period.
CSS contributors can make additional personal or spouse contributions or salary sacrifice payments into a PSSap Ancillary Account.
Joining PSSap as an Ancillary Member will not change your CSS membership or final CSS benefit calculation in any way. It means that you will be a member of two super schemes – the CSS and PSSap. Your final PSSap benefit will be entirely separate to your CSS benefit.
Personal After Tax Contributions
Personal and spouse contributions can be made via BPAY, cheque and money order. Please note that contribution caps apply – if you exceed the cap, you may have to pay extra tax. Please refer to the Australian Tax Office website for more information on contribution caps.
Claiming tax deductions
You may be able to claim a tax deduction for personal (after-tax) contributions made into your PSSap Ancillary account. Any amounts claimed as a tax deduction will have 15% tax deducted and be counted towards your concessional (before-tax) contribution cap. For further information about this type of contribution refer to the Australian Tax Office website.
Salary sacrifice contributions
Salary sacrifice payments are before tax contributions which are taxed at 15% on entry to your account.
What are the benefits of salary sacrificing?
Salary sacrifice payments are before tax contributions which are taxed at 15% on entry to your account. This means that you could pay less tax on salary sacrifice contributions than you would pay if you took that same amount as ordinary income.
Does it mean I get paid less each fortnight?
If you salary sacrifice super contributions you will have less take home pay each fortnight. However, this may be a tax effective way to save for your retirement if your personal tax rate is greater than 15% as the amount going into your super may be more than the amount your take home pay is reduced by.
The amount you decide to contribute is entirely up to you, so you can make sure it’s affordable and within your budget.
Things you need to know:
- The higher your income tax rate, the more benefit you get. The benefits for those earning less than $37,000 per year are limited.
- There is a limitcap on before-tax super contributions. See more information on contribution caps via the Australian Tax Office website.
- Your employer may have a cap on the amount you are allowed to salary sacrifice. Be sure not to exceed this amount.
- You should talk to your employer to make sure that you understand whether salary sacrificing amounts into super will impact on any other element of your remuneration.
- Contributions into super generally must remain within super until you retire and reach your preservation age, so you need to weigh up the costs and benefits of salary sacrifice, taking into account your objectives, financial situation and needs before making any financial decisions regarding your super.
How do I set it up?
- Check whether your employer allows you to salary sacrifice into super. Most employers allow salary sacrificing but it’s best to confirm with your personnel/HR section.
- Complete the Apply to join PSSap as an Ancillary Member form.
- Instruct your employer to deduct your nominated salary sacrifice amount from your regular pay. Once it’s set up, the nominated amount will automatically be deducted from your salary and deposited into your PSSap Ancillary account until you ask them to stop.