Need to know more about salary sacrifice, low income tax offset, co-contributions, spouse contributions and contributions caps? Contact Mercer Super AU.



Salary sacrificing is a simple and effective way of boosting your super and saving for retirement. And it comes with excellent tax advantages.

By salary sacrificing, you can make additional contributions to your super before you pay tax. You’ll reduce your taxable income and increase your super balance at the same time. Super contributions are taxed at a rate of 15% (or 30% if you earn $250,000 a year or more), while your income can be taxed anywhere up to 47%.

Speak to your employer

Most employers will be able to set up salary sacrifice; however some may not offer it. You should check with your HR or payroll department first. If they do offer it, ask them to put more of your before-tax pay into your super account. You’ll need to tell them how much you'd like to put in from each pay. It can be a dollar amount or a percentage.

If you receive a bonus on top of your pay, you can choose to salary sacrifice it also if you already have a salary sacrifice arrangement in place. Any salary sacrifice arrangement can only relate to future pay, not past earnings.

Keep an eye on your contributions gap

It’s up to you to make sure you don’t go over your contribution caps.

Mercer Super customers can call us for free general advice about super.

THE FACTS ABOUT THE Low Income Superannuation Tax Offset

If you earn less than $37,000 per year, up to $500 of tax you pay on your super contributions is deposited back into your super account by the Australian Taxation Office (ATO). This is called the Low Income Superannuation Tax Offset (LISTO).

The Government may contribute up to $500 per financial year to your super. The ATO will work out how much you should be paid and then refund it as a payment your super account. You’ll only receive a payment if your LISTO entitlement is at least $20.


If you’re eligible and you make an after-tax contribution to your super, the Government will also make a co-contribution of 50c for every dollar you put in, up to $500.

To be eligible for a super co-contribution you must:

  • Earn a total income – including reportable employer super contributions – of less than $51,813
  • Make an after-tax contribution to your super
  • Be an Australian citizen, a permanent Australian resident or a New Zealand citizen working in Australia
  • Receive at least 10% of income from employment
  • Be less than 71 years of age
  • Lodge your tax return for the year in which you make the contribution.

How much could you be eligible for?

The scheme works on a sliding scale; the lower your income, the more you may get from the Government. If you're at the lower end of the income scale and you make a personal super contribution of $1,000, you could be eligible for the maximum co-contribution of $500.




$36,813 $1,000 $500
$38,688 $867 $433
$40,563 $733 $367
$42,438 $600 $300
$44,313 $467 $233
$46,188 $333 $167
$48,063 $200 $100
$49,938 $67 $33
$51,813 $0 $0


Your total income includes assessable income, reportable fringe benefits and salary sacrifice.

How co-contributions are paid

When you complete your tax return, you need to declare that you made a personal contribution to super. Your super fund will also lodge a record of your contributions with the ATO by 31 October.

If you satisfy the requirements, the ATO will pay your co-contributions directly to your super account by 30 June in the following financial year. If not, you should follow it up with the ATO.

Mercer Super customers can call us for free general advice about super.


You can help boost your spouse’s retirement savings by making a contribution to their super account. Spouse contributions must be made from your after-tax income.  Spouse contributions aren't subject to the usual 15% contributions tax and they are tax-free on withdrawal.

If you put as much as $3,000 into your spouse’s super, you could get an 18% tax offset.

How it works

The scheme works on a sliding scale and the tax offset decreases the more your spouse earns.

If your spouse earns up to $37,000 you’ll get the full 18% offset – saving you up to $540 in tax. This then moves along the scale and then cuts off altogether when their income reaches $40,000.

You can use this strategy if:

  • Your spouse is under 65 years of age
  • Your spouse’s total income, including reportable fringe benefits and employer super contributions, is less than $40,000
  • You and your spouse are Australian residents for tax purposes
  • You’re not living separately on a permanent basis
  • Your spouse has not exceeded their non-concessional contributions cap for the relevant year
  • Your spouse has a total superannuation balance less than the general transfer balance cap ($1.6 million for 2017-18) immediately before the start of the financial year in which contributions were made.


When you split your super, you transfer some of your super savings for the year into your partner’s account.

What you can do

  • You can split up to 85% of your before-tax super contributions, including your employer contributions and any salary sacrifice contributions you make, with your spouse.
  • Your spouse must be under 64 and not permanently retired.

When doesn’t it apply?

  • You can’t split contributions with a spouse who is aged 65 or over. Contribution splitting can only be done after the end of the financial year.

Mercer Super customers can call us for free general advice about super.


Super provides some excellent tax benefits and concessions designed to help Australians contribute to their retirement savings while they’re working.  You can contribute as much as you like, but there are limits to the tax concessions.

These limits are known as contributions caps and if you contribute more than the cap you might have to pay extra tax.

Understanding the limits  

The cap amount and how much extra tax you have to pay depends on your age and whether the contributions you make are:

  • Before-tax (concessional) contributions, or
  • After-tax (non-concessional) contributions.

Before-tax (concessional) contributions  

Before-tax contributions (including contributions made by your employer under the Super Guarantee scheme) are taxed at a rate of 15%, which is much lower than income tax for most people.

If you earn $250,000 or more per year your super contributions are taxed at 30%, still considerably lower than the highest income tax rate.

Currently, the concessional contributions cap is:

  • $25,000 per year for everyone.

If total before-tax contributions exceed the cap, you’ll pay a higher tax rate on the excess amount.

From 1 July 2019, individuals may be allowed to exceed their annual concessional contribution cap in a given financial year. In order for this provision to apply, their Total Superannuation Balance on 30 June immediately prior to the start of that financial year must be less than $500,000 and they must have unused amounts of concessional contribution cap from within the previous 5 years. Only unused amounts from 1 July 2018 onwards will be considered. If these provisions apply, unused concessional cap amounts from eligible prior years will be available to be used where the current year cap is exceeded, avoiding any excess contribution assessment.

After-tax (non-concessional) contributions  

After-tax contributions are additional contributions you make from your take-home pay. This means you’ve already paid tax on this amount. However, any investment earnings from these contributions are taxed at 15%, lower than the rate you would pay on investment earnings outside super.

The current cap on after-tax contributions is:

  • $100,000 per year for everyone

If you go over the cap, your excess contributions will likely attract a penalty tax of 47% - on top of the income tax you’ve already paid.

The non-concessional contributions reduces to $0 for any given financial year, where the individual held a Total Superannuation Balance of $1.6m or more on 30 June immediately prior to the start of that financial year.

Bringing forward

If you are under 65 at the beginning of the financial year you can bring forward another two years of after-tax contributions and contribute up to $300,000 in one financial year. This means you will not be able to make any more after-tax contributions for another two years. If you do, you will be subject to excess tax.

If you are under 65 and contribute more than $100,000 in one financial year you will automatically trigger the bring-forward rule.

The bring-forward rule may be worth considering if you are thinking of selling assets and transferring the proceeds into your super, or if you want to invest an inheritance.

The number of years able to be brought forward in a given financial year is determined by your Total Superannuation Balance (TSB) on 30 June immediately prior to the start of that financial year as follows:

  • If your Total Superannuation Balance is less than $1.4m, you can use the full three-year bring forward to make a $300k contribution.
  • If your Total Superannuation Balance is between $1.4m and $1.5m, you can only bring forward one additional year of caps, to make a $200k contribution.
  • If your Total Superannuation Balance is between $1.5m and $1.6m, no bring forward is available and you can only contribute $100k.
  • Above $1.6m Total Superannuation Balance, the cap reduces to $0 and contributions of this type cannot be made.


Your preservation age is the age you can access your superannuation benefits. This is the balance of your super account plus your insurance cover, if you have one.  Preservation age is at least 55 and can be up to 60 years of age, depending on your date of birth. Anyone born before 1 July 1960 has a preservation age of 55 years. If you were born on or after 1 July 1964, then your preservation age is 60 years.

See the table below for your preservation age.

Date of birth

Preservation age

Before 1 July 1960


1 July 1960 – 30 June 1961


1 July 1961 – 30 June 1962


1 July 1962 – 30 June 1963


1 July 1963 – 30 June 1964


1 July 1964 or after


Your preservation age is different to your Age Pension age.

Contact Mercer Super AU for all of your superannuation and financial planning queries.
Mercer Super Trust: 1800 682 525
Calling from Overseas: +61 3 8306 0900

8.00am - 7.00pm
Monday - Friday (AEST/AEDT)

Mercer Super Australia has offices in Melbourne, Glen Waverley, Sydney, Paramatta, Canberra, Brisbane, Adelaide and Perth.

Office: 727 Collins St, Melbourne
Mail: GPO Box 9946, Melbourne VIC 3001
+61 3 9623 5555

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