Increasing Super Contributions with Salary Packaging

I recently developed a strategy for a client which, in effect, will increase their compulsory employer superannuation contributions.

• Employers often 'package' their employee's remuneration package, possibly including a car allowance. However, some employers only calculate their compulsory super contributions based on the gross base salary (which doesn't include the car allowance component)
• If the car allowance component is say $17,000, the employee may miss out on $1,572.50 in compulsory super contributions (even higher as of July 2014)
• My recommendation was to not pacakage their car allowance, thus increasing their super contributions by $1,500+ per year
• The client can still claim their ususal tax deductions for the car, the only difference is the tax refund is not paid until their tax return is completed each year

Each individual's situation is different, and this strategy may not suit everyone, so make sure you seek advice from qualified professionals, before changing any salary packaging arrangements.

Contact us, for a free financial assessment, if you need help.