Monday, September 29, 2008
Last week, I ended the week off by listing the different types of superannuation payments that could be made through the Superconnect Clearing House. One of these was the "salary sacrifice". And I hear you asking, well what is salary sacrifice and when might this be used for my employees.
The best place to go to get the right definitions of this is the Taxation Office website and look under salary sacrifice. Note the menu of items that outlines all the topics that can be listed about salary sacrifice.
Simply put, salary sacrifice is where an employee agrees to forego some of his/her salary to gain a benefit, such as being able to put more away into superannuation. But where the benefit really makes sense for the employee is that you the employer matches the salary sacrifice so that in essence the employee is doubling the benefit. But note, a salary sacrifice cannot be done for past earnings. A salary sacrifice can only be done for current and future earnings.
And as I have already said, the Superconnect Clearing House enables you the employer to make salary sacrifice payments on behalf of your employees through the system. The Superconnect system is the simplest way to make superannuation payments.