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 Salary sacrifice for superannuation contributions has taxation implications which vary on an individual basis. You
 should seek independent advice from a qualified financial adviser before entering into a salary sacrifice arrangement
 to ensure that you understand the full impact on your circumstances.

            What is salary sacrifice for                       This example does not take all financial considerations
          superannuation contributions?                        into account, eg the surcharge tax, taxation on
Salary sacrifice for superannuation contributions allows       superannuation benefits when exiting, and NTGPASS
you to pay before-tax salary directly into a regulated         and CSS after-tax contributions.
superannuation fund. Before-tax contributions are                                                  No Salary           Salary
known as employer contributions which are taxed at                                                 Sacrifice          Sacrifice
15% in the fund.
                                                                 Gross Salary                        $50 000           $50 000
Previously most employees were only eligible to make             Salary Sacrifice                        -             $2 941*
superannuation contributions from their after-tax salary.        Contributions
After-tax contributions are known as employee                    Before-Tax Salary                   $50 000           $47 059
contributions which have already been taxed at your
                                                                 PAYE Tax plus Medicare              $12 130           $11 114
marginal tax rate.
                                                                 Levy (approx.)
This new salary sacrifice arrangement is available to all        After-Tax Salary                    $37 870           $35 945
employees in the Northern Territory Public Sector from 28        After-Tax Superannuation
September 2001, regardless of whether you are a member                                                $2 500                -
of the NTGPASS, CSS, NTSSS or a private fund.
                                                                 Take Home Pay                       $35 370           $35 945
                                                                 Per Fortnight                        $1 356            $1 378
              What are the benefits of                         *To achieve a net $2,500 to the Fund you must increase contributions to
                salary sacrifice?                              allow for 15% tax on entry to the Fund. (The formula is $2,500/0.85).

Salary sacrifice will enable you to accumulate more
savings for your retirement.                                           How much can I salary sacrifice and
Depending on your individual financial circumstances,                    when can I vary contributions?
salary sacrifice may also provide taxation benefits.           You can sacrifice any amount up to a maximum of 50%
However, it is important that you consult with a               of your usual fortnightly salary plus approved
qualified financial adviser on whether salary sacrifice is     allowances. The contributions will be by way of
suitable for you. As noted above, employer                     regular fixed dollar payroll deductions.
superannuation contributions are taxed at 15% which is         You can elect to commence at any time by completing
generally lower than your marginal tax rate. Salary            the Salary Sacrifice Contributions Form available from
sacrifice will therefore reduce your total tax payable.        your payroll/personnel officer. Generally, your election
However, factors such as the surcharge tax for high            will be effective from the next pay period.
income earners, preservation of contributions to at least      However, you can only vary your contributions
age 55 and the taxation levied on your superannuation          annually by advising your payroll officer before the
benefit when you receive a benefit, may reduce or              October 1 review date.
eliminate the benefits of salary sacrifice.                    In addition to the annual variation, any request for a
                                                               reduction in contribution will be considered
                                                               individually under financial hardship grounds.
  An example of how salary sacrifice for super
      contributions affects take home pay                                     Where can I pay my salary
The following table illustrates the difference in take home                    sacrifice contributions?
pay of an employee on a before-tax (gross) salary of           Your salary sacrifice contributions will be paid into
$50,000 p.a. who elects to make 5% additional                  your existing fund unless you are a member of CSS,
contributions of $2,500 from before-tax salary (ie salary      because the CSS Fund does not receive salary sacrifice
sacrifice), compared with paying the same contribution         contributions.
from after-tax salary.

                                                                                                             Updated: January 2005
                                                                                      Can I salary sacrifice for
•   CSS
                                                                                   a non-superannuation benefit?
Under the new arrangements effective 20 November
                                                                       New salary packing arrangements have been put in
2003, CSS members who choose to salary sacrifice
                                                                       place. Please refer to NTPS bulletin issue 02/2004
must be contributing a minimum of 5% after tax
                                                                       issued by the Office of the Commissioner for Public
contributions to CSS before being eligible to participate
                                                                       Employment before making any arrangements. The
in salary sacrifice arrangements. CSS members who
                                                                       scheduled date for these new arrangements is 1 April
meet this criteria can now sacrifice up to 50% of their
                                                                       2004 coinciding with the FBT year.
salary to a fund of their choice.
                                                                       Salary packaging is allowable under current ATO
                                                                       legislation and rulings but these are subject to change.
•   NTGPASS                                                            NTPS salary sacrifice packaging arrangements must
                                                                       comply with that legislation and therefore may be
NTGPASS members can now elect to salary sacrifice                      varied from time to time or may be ceased.
into a superannuation fund of their choice. However to
be eligible to salary sacrifice, members must be paying                Salary packing will be available to all NTPS employees
6% after-tax contributions before salary sacrifice is                  employed in accordance with the Northern Territory
made.                                                                  Public Sector Employment and Management Act,
                                                                       however, application will only be possible where
If not already paying 6%, you must increase to 6%                      facilitating  clauses    in    Enterprise   Bargaining
as part of the 1 October review, prior to making                       Agreements provide for salary packaging.
your application.
                                                                       Due to ATO legislation, different packaging arrangements
                                                                       will apply to employees who are employed in a hospital
                                                                       based location.
•   Employees commencing after 10.08.99
Employees who commenced on or after 10 August 1999
will salary sacrifice to the fund that you nominated for                                      Surcharge tax
your employer superannuation guarantee contributions.
                                                                       Employees with assessable taxable incomes above a
                                                                       prescribed amount ($94,691 for 2003-04 financial year,
                                                                       indexed yearly) will be assessed by the ATO for a
 Will salary sacrifice affect my superannuation                        surcharge contributions tax of up to 14.5% for the
      entitlements from my existing fund?                              2003-04 financial year, 12.50% for the 2004-05 financial
                                                                       year and 10.00% for the 2005-06 financial year and
No, your superannuation entitlements from the                          onwards.
NTGPASS, CSS, NTSSS or under the new
superannuation arrangements will not be affected if you                Each year, funds advise the ATO of the amount of your
salary sacrifice.                                                      employer contributions which is added to your
                                                                       assessable income. The ATO advise the fund of any
Your employee and employer superannuation                              additional tax due by you. The fund pays the surcharge
contributions to your existing fund will be based on                   tax and deducts it from your account.
your normal pre-salary sacrifice gross salary.
                                                                       In unfunded schemes such as NTGPASS and CSS,
Members of the NTGPASS and CSS must continue to                        members may choose whether to pay the surcharge tax
pay employee contributions to their fund, and continue                 to the fund each year or defer payment. The surcharge
to be subject to the rules and conditions of those funds.              tax is not required to be paid until a benefit is due to be
                                                                       paid to you, when it will be deducted from your benefit.
                                                                       If the surcharge tax is left unpaid in the fund, interest
                    Preservation                                       will accrue at the 10 year Treasury Bond rate.
As advised previously, salary sacrifice contributions are
preserved by legislation. These contributions are
included in your Reasonable Benefits Limit (RBL)                                          Further Information
assessment and in your taxation assessment when you                    A financial adviser should be consulted on the effect of
withdraw a benefit.                                                    salary sacrifice on your personal circumstances.
                                                                       A salary sacrifice calculator, this brochure and the
          Will there be fees or charges?                               application form are available at NT Superannuation
                                                                       Office website
Yes, there will be an initial establishment charge of
$57.20 ($52+GST), then an annual administration fee                    Helpful information such as ‘Super Decisions’ is an
of $57.20 deducted from salary after the 1 October                     Australian Securities & Investments Commission guide
review.                                                                available on Other useful sites are
                                                             , or call ATO on 131 020.

             Disclaimer: The information concerning taxation and superannuation legislation contained in this document is

                                                                                                                 Updated: January 2005

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