What Is the Difference Between Salary Sacrifice and Voluntary Post-Tax Member Contributions?

Boosting Your Superannuation: Pre-Tax vs Post-Tax Contributions

There are two common ways to boost your superannuation in Australia: through salary sacrifice or voluntary post-tax contributions. While both methods increase your retirement savings, they differ in how and when they are taxed.

Key concept: Salary sacrifice is taken from your gross income (before tax is calculated), while voluntary contributions are made from your net income (after tax is taken out).

Salary Sacrifice (Pre-Tax Contributions)

Salary sacrifice is an agreement with your employer to direct some of your gross pay into your super fund. These are known as concessional contributions and are taxed at 15% in your fund (unless you exceed the cap). Because the amount is taken out before income tax is calculated, your taxable income is reduced and you may pay less tax overall.

Example: If your gross income is $1,000 and you salary sacrifice $100, your taxable income becomes $900. The $100 goes into super and is taxed at 15% instead of your marginal rate.

Voluntary Contributions (Post-Tax Contributions)

Voluntary post-tax contributions are payments you make to your super fund using money from your take-home (after-tax) pay. These are called non-concessional contributions. You have already paid income tax on this money, so it is not taxed again when entering your super fund. However, you do not receive a tax deduction for these contributions.

Example: You receive your full net pay into your bank account and later transfer $50 to your super fund using BPAY or direct deposit.

Contribution Caps

• Concessional (salary sacrifice + employer super): $27,500 per year
• Non-concessional (post-tax): $110,000 per year, or up to $330,000 using the bring-forward rule
• Note: These caps are set by the ATO and may change each financial year.

Tax Treatment

• Salary sacrifice: taxed at 15% in the super fund
• Post-tax contributions: not taxed on entry into the fund

STP Reporting and Visibility

• Salary sacrifice: must be reported in Single Touch Payroll (STP) as Salary Sacrifice Type S (Super)
• Included in your RESC (Reportable Employer Super Contributions) on your income statement
• Post-tax contributions: made personally and not reported through STP or visible to the ATO via your employer

Government Incentives

• Post-tax contributions: may be eligible for the government super co-contribution if you meet the income and work tests
• Salary sacrifice: does not qualify for the co-contribution

Entering Contributions in Lightning Payroll

To record either type of contribution in Lightning Payroll:

Go to: Employees > Super > Superannuation Contributions

To enter Salary Sacrifice (RESC):

1. Click the Edit Salary Sacrifice RESC button at the bottom of the Super tab
2. Enter the salary sacrifice amount, frequency, and description

To enter a Post-Tax Super Contribution:

1. On the right-hand side under Post-Tax Additional Superannuation Contributions:
2. Click the green + button to add a new row
3. Enter a description (e.g. “Member Contribution”) and the contribution amount (e.g. $15.00)

Note: These post-tax contributions are not treated as RESC and are included in tax calculations.

Summary Table

For more information, visit the ATO’s superannuation page or consult a licensed financial adviser.