Whether you are just starting in the ADF or you’ve been there for many years, there are a few ways that you can save money with salary sacrifice. This is a great way to boost your super balance, reduce your tax liabilities and pay less take-home pay.
Reduces tax liabilities
Taking advantage of the ADF salary sacrifice scheme can save you a significant amount of tax. There are several ways in which you can make this happen. For example, you can opt to sacrifice a portion of your gross pay, or you can opt to pay a premium for non-cash benefits. However, before you start putting together your salary sacrifice scheme, you should consider a few things.
First, you need to understand what the salary sacrifice is all about. It’s a legally binding variation of an employment contract and involves a permanent preceding of a portion of your salary. It can be a verbal agreement or a written document. You also need to consider how much you are willing to sacrifice and whether you are satisfied with your current benefits package.
Secondly, you need to consider how to reduce your taxable income and how to minimise your income tax. If you’re in a position to do so, you might consider taking out a mortgage or borrowing to buy a home.
Lowers take-home pay
Among the perks of being an ADF member are salary and benefits packages. There are many to choose from, but one of the more popular is the SMART salary sacrifice scheme. This scheme allows ADF members to make several different savings on National Insurance. This is particularly helpful for those employees with families living in the same home.
The aforementioned SMART scheme is an excellent place to start, but there are other ways to save on your monthly bills. For example, some ADF members opt to use a car loan provider that will allow them to take advantage of cheaper repayments whilst avoiding the tax man’s ire. Another alternative is to take out a loan from a local bank.
It’s always a good idea to be cautious, but a little forethought can go a long way. Using a calculator to estimate how much your ADF salary could be saved could be the first step to getting out of debt.
Boosts super balance
Whether you’re new to super or are considering adding to your current super balance, boosting your super balance through ADF salary sacrifice can be a tax-effective way to increase your retirement savings. However, weighing up your financial situation, personal objectives and investment goals before choosing a super fund is essential.
You should seek independent advice before making any decisions about your superannuation. If you’re unsure whether to make an after-tax or a salary sacrifice contribution, consult a qualified financial planner or accountant. You can claim a tax deduction if you decide to make an after-tax contribution. You can also contribute up to 10 per cent of your pre-tax pay into your superannuation account.
You can boost your super balance through salary sacrifice if you’re in the Australian Defence Force (ADF). You can contribute to your ADF Super account, and your employer will automatically deduct an amount from your salary each pay period until you stop.
It can be used to purchase other benefits.
Whether you are a new ADF member or an old hand, there are many benefits to be gained from salary sacrifice. It allows you to spread out the cost of certain outgoings and is tax efficient for many higher-rate taxpayers.
One of the main advantages of salary sacrifice is that it allows you to contribute to a pension. Depending on your employer, it can reduce your taxable income. It also allows you to increase your super balance. There are several tax-efficient ways to do this. It is worth speaking to your employer before signing up for a salary sacrifice arrangement.
Using salary sacrifice can also help you make mortgage repayments. This is because it is considered an expense payment taken from your salary before your take-home pay is calculated. However, it is essential to remember that these payments are not tax-free.
Other benefits that can be purchased through ADF salary sacrifice include pensions and childcare. This can be done by reducing your maternity pay, state pension or paid leave.
ADF Salary Sacrifice
Taking out an ADF salary sacrifice can be an excellent way to save money on your taxable income. You can also boost your super balance. This can be especially beneficial for high earners.
The contributions may not be refundable in the first two years of using a salary sacrifice scheme. However, the amount you have paid into your super fund is tax-free if you take out a distribution.