There are a few reasons why you might make an after-tax
contribution over sacrificing some of your salary (or vice versa).
Reasons to consider after-tax contributions:
- You’re a low-income
earner. This means you don’t get taxed a lot, so what you save on tax through
salary sacrificing isn’t worth taking home less pay.
- You're eligible for
the Government co-contribution, which is an amount the Government contributes
to your super.
- You’re not locked
into scheduled contributions and can make one-off payments whenever you want
- Your employer
doesn’t offer salary sacrificing arrangements.
Reasons to consider salary sacrificing:
- You may be getting taxed a decent amount, so whatever tax savings you may be eligible for through salary sacrificing might not be worth it.
- You save on tax by
lowering your overall taxable income, as more of it is going into your super
- You prefer to add
to your super in a way that's hands-off, with automatic scheduled payments
made by your employer.
Before making an after-tax or salary sacrificed contribution, you need to be aware of the contribution caps that apply. If you exceed the cap, you may need to pay extra tax.