Re: Salary Sacrifice Thread

[MummaBear03]

What exactly is salary sacrifice? Does it drop your gross income? If someone was paying child support and using salary sacrifice would the child support amount be affected? Or is the gross amount inclucing that amount? :confused:

[Ashy]

Hi there

Salary sacrifice is taken out pretax - therefore reducing your Grose income - this is the whole point of salary sacrificing to reduce your grose income and get more money in your hand through a tax break. On your group statement - your grose income is reduced due to the payment coming out pre-taxable.

So it would effect payment etc.

[MummaBear03]

Hi there

Salary sacrifice is taken out pretax - therefore reducing your Grose income - this is the whole point of salary sacrificing to reduce your grose income and get more money in your hand through a tax break. On your group statement - your grose income is reduced due to the payment coming out pre-taxable.

So it would effect payment etc.

That's what I thought it was. My father used salary sacrificing to pay into his super. No wonder on an income of $90,000/year he was only paying a small amount of child support! He's dipping into his super now, my brother stopped having to be paid for in November last year. Sneaky b@stard!!!

Ok thanks, that's all I wanted to know. I don't understand all this stuff much, don't have any reason to use salary sacrifice. Can it be used to pay off a home loan? Or does that work out more than paying it through the bank/credit union.

[missie_mack]

Yeah it makes sense it would reduce the possible CSA payments.... wow never thought of it like that :(

[aje001]

It does reduce your Child Support, but remember that it also reduces your take home pay.

Eg:

I might be earning $800 per week, and paying $200 tax. My take home pay would then be $600.

If I salary sacrifice $50 a week into my super, then I am earning $750 per week, and paying $180 tax. My take home pay is $570 per week. So what it does is lower you taxable income, your tax withheld, and your take home (Gross) pay.

It's a great way to put money into your superannuation or to reduce your pay so you get into a better tax bracket (if you can afford it).

[Kassiasmum]

I think you will find the rules on sal sac in regards to CSA have changed under the new CSA legislations. I think anything other than super, they add back on to your taxable income.

[missie_mack]

It does reduce your Child Support, but remember that it also reduces your take home pay.

Eg:

I might be earning $800 per week, and paying $200 tax. My take home pay would then be $600.

If I salary sacrifice $50 a week into my super, then I am earning $750 per week, and paying $180 tax. My take home pay is $570 per week. So what it does is lower you taxable income, your tax withheld, and your take home (Gross) pay.

It's a great way to put money into your superannuation or to reduce your pay so you get into a better tax bracket (if you can afford it).

I think the problem might be that you can salary sacrifice your mortgage, electricity, car (including all running costs), computers, childcare etc etc So while you might be bringing home less money you might also have less expenses coming out of the take home pay

[PunkyDiva]

Our salary sacrifice is a bit different as my DH works for a non profit organisation but we give Centrelink a heap of different figures as per the accountant works out and what we receive in Child Benefits is reduced because of it so I imagine it would affect other payments too.

We pay car lease, rent/mortgage and household bills from ours before we pay tax so adds up to about $25,000 tax free a year.

[MummaBear03]

I think you will find the rules on sal sac in regards to CSA have changed under the new CSA legislations. I think anything other than super, they add back on to your taxable income.

Too bad it's too late for my mum and other people who had their youngest child grow out of child support before the rules came in hey.

I don't get child support so it's not an issue for me personally but I think it sucks if that's how it works.

[funnyfarm]

I think you will find the rules on sal sac in regards to CSA have changed under the new CSA legislations. I think anything other than super, they add back on to your taxable income.

:iagree: I was listening on the radio a couple of weeks ago and the CSA rules are changing. This is one of the changes. It is to stop people salary sacrificing alot to reduce their income so they pay less child support :yelclap:

Maybe check out the website. They might have a summary of the new laws.