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When you’re under pressure to give that perfect present at Christmas it can be much harder to stick to a budget. Find ways to make your gift budget go further with our top tips for giving generously without going overboard on spending. Be prepared Taking time to plan how much you’ll spend on each person is a good start if you want to keep gift spending reasonable. There’s no harm in being open about this with family and friends, so nobody has to be anxious about what others might be expecting. When discussing spending limits and making things fair, it’s worth keeping in mind that everyone has differences in their income, financial commitments and number of people to buy for. So it’s not necessarily a case of agreeing on the same budget per gift for everyone. Secret Santa A Secret Santa or Kris Kringle approach to buying gifts can be the ideal way to make your budget achievable, without leaving anyone feeling like they lost out in the gift department. Agreeing a set amount for everyone to spend on a single person can work just as well for colleagues, friends and family. Be kid-wise Another approach larger families often take is to limit gift-giving to kids only. After all, they’re usually the ones who lack the spending power to buy what they want and get extra excited about the chance to receive gifts as a result. Vouchers Although some might write them off as a gift that hasn’t taken thought and effort to choose, gift vouchers can be the very best way to make sure friends and family get the gift they want. Give time Another welcome voucher could be one that offers help with something you know a friend or family member struggles to get around to. Whether it’s babysitting, a DIY project or stocking the freezer with enough meals to last a week, the promise of your time and energy can often deliver a more valuable gift without costing you a single dollar. Pre-loved Buying gifts second-hand from Gumtree, eBay or your local Facebook marketplace can be better for your wallet and the planet too. Not only does it save you money, it could also give a new home to something that would otherwise end up in landfill. Source: Money & Life

Christmas is a wonderful time of year in Australia, filled with summer foods, decorations and of course, gift giving. This year will feel even sweeter for many, as friends and family reunite for the first time in months, if not years. Here are a few ideas to help you stretch your Christmas gift budget further, so you can enjoy more family time, without the financial hangover. Buy local If you want to avoid price rises and shipping delays this silly season (not to mention helping the planet) one of the best things you can do is buy locally. By purchasing from small businesses, artisans and producers in your local area, you’ll help to create jobs and keep more of the money in your community. Local suppliers often also have different and unique products for sale that aren’t available from national chains. So look out for your local Christmas market, craft fair or farmers market, or choose gifts from a small businesses nearby. Get creative If you enjoy making things, this is for you. What could embody the spirit of giving more than creating your own beautiful handmade gifts? This is the perfect activity to do with kids (or without!). Baked goods, scrapbooks, drawings, paintings, jewellery, soaps, candles, even face masks can all be made. Not only will you save money, giving will feel more meaningful when you’ve put your own time into it. Give an experience Even better than material goods, why not give the gift of an experience? Experiences are more memorable, offering the recipients a chance to connect and enjoy themselves. The possibilities are endless, so you’re sure to find something that suits. You could go traditional with restaurant vouchers, movie tickets, zoo or aquarium passes, or more unusual, like hot air ballooning, art or cooking classes or even a weekend away. Give your time If you can’t afford an elaborate gift, you still have something everyone needs – time! Giving your time without expecting anything in return is the perfect way to embrace the spirit of the holidays. Perhaps you could gift an elderly relative with some help around the house, offer to babysit your sister’s kids for a night, finish a DIY project for your mum, or stock someone’s freezer with enough meals for a week. There are lots of thoughtful and creative options that will keep your budget intact. Make a donation If the people you love truly don’t need anything, perhaps they’d appreciate you donating a gift on their behalf to a worthwhile charity. Remember; less is more! Aussies are a generous lot, and we’re each planning to spend $726 on gifts alone this Christmas! Now we all want to give people the world, but perhaps it’s worth taking that more literally this year. In most cases, one simple gift is enough and can even be more appreciated. You’ll be doing them, the environment, and your budget a big favour. Of course, if you’d prefer to focus on spending time together rather than doing the Christmas shopping, that’s ok too! Discuss how you feel with those closest to you and let them know you’ll be prioritising time together over physical gifts. It could help you start the new year in a better financial position than ever. Source: Money and Life

Donating to a charity or cause you care about is a win-win for both you and the charity. Charities rely on the generosity of donors to help them do their work, while you get the satisfaction of supporting a worthy cause. Even better, many donations are tax-deductible, meaning they reduce your assessable income. How do I make a tax-deductible donation to charity? The ATO has rules that govern whether a donation can be claimed as a deduction on your tax return. To be eligible, your gift or donation needs to be made to a charity that has ‘deductible gift recipient’ (DGR) status. Most DGR charities will list this on their website, but you can also look it up on the Australian Business Register. In addition, it must be a donation of money or property of more than $2. That can include financial assets like shares. In some cases, there are special rules (gift conditions) that affect the types of deductible gifts the charity can receive. Always check with the charity before making a donation, especially if it’s a substantial sum. When is my donation not tax-deductible? If you receive anything in return for your donation, the ATO won’t consider it a ‘gift’ for tax purposes, meaning it’s not deductible. For example, buying raffle tickets or paying to attend a fundraising dinner. The ATO views this as an exchange of goods for money, therefore it’s not tax deductible. If you receive something small, with no monetary value as a thank you, for example a sticker, that’s ok. Keeping track of tax-deductible donations To claim a tax deduction, you need to have proof of making the donation. That can be in the form of a receipt, bank statement or other written record. Most charities will issue you with a receipt when you make a donation, although they’re not legally required to. Always ask for a receipt and save it together with your other tax-deductible receipts. You can claim donations for gifts of up to $10 without a receipt.  How do I claim my donation as a tax deduction? For gifts of money over two dollars you can claim the full amount of the donation in your tax return. Simply include your deductions in the Gifts or Donations section of your tax return. Different tax rules apply for donations of property or shares, so seek professional tax advice. How much tax could I get back? Some charities have donation calculators on their website to help you estimate your potential tax benefit, like this one from World Vision Australia. Be aware that your actual tax refund may differ from that shown, depending on your overall tax position. Always seek professional tax advice if you’re considering making a substantial donation, or looking to reduce your tax bill.  What else to consider when making a donation Do your research when choosing a charity, especially if you’re looking to make a regular or large donation. Choose a charity or cause that’s important to you and check their credentials. Look into the kind of activities they do and find out how your donation will be used. You can search the Australian Charities and Not-for-profits Commission (ACNC) register to find out more information about the charity, including financial information, a summary of activities and annual reports. Beware that scammers often pose as legitimate charities and may contact you via phone, SMS or email asking for donations. Always look up the charity on the Australian Business Register and/or the ACNC register as outlined above. Source: Money & Life  

Financial planning is something more and more people are considering as a service they need to help them get the best from their finances and focus on putting their money towards what matters to them most. In fact, according to 2020 research, 2.6 million Aussies said they intended to seek help from a financial planner over the next two years. The uncertainty of the COVID pandemic has definitely played a part in highlighting the value of financial advice. In the same survey of non-advised Australians, almost half (44%) said the COVID-19 situation had increased their likelihood of seeking advice. It’s often the case that people seek financial advice when there’s a major change in their life like buying a home, growing their family, inheriting money or retiring. But it doesn’t have to take a global crisis like Covid-19 or one of life’s upheavals for you to benefit from working out a financial plan with a qualified expert. A qualified financial planning professional can make a positive difference to your financial future at any stage in your life. Working with a financial planner isn’t just about making the most of the money you have now. It’s a chance to make the choices, for your life and finances, that will enable you to enjoy peace of mind and work towards your most important goals, starting from today. Source: Money & Life

The COVID-19 pandemic has changed many aspects of our daily lives, and romance is no exception. While lengthy separations have led some relationships to end, other couples are choosing to move in together more quickly than they might have expected. If you’re planning on living together, you might be wondering whether to merge your finances. Combining money is a big step for any couple, and not something that has to be tackled all at once. There are several ways to share money as a couple, and you might like to take it in stages. Before you merge your finances It’s important to be honest, open and transparent about your financial situation and expectations upfront. Money can become a source of tension in relationships, often due to mismatched values, poor financial habits or financial infidelity. Before merging your finances, set aside a time to talk about your current financial situation, including any debts or bad spending habits. Discuss your shared goals and vision for the future. Put a financial plan in place to help you get there. And work out which approach to sharing money will work best for both of you, so that you can set up your accounts to manage household expenses. Also keep in mind that once you’ve been living together in a relationship for a period of time, you’re considered to have a spouse for legal and financial purposes. This can have implications for your tax returns, government rebates and benefits, and, in the event of a split, can affect how your assets are divided up. Ways to share money If you’re planning on moving in together, you’ll need to work out how you’d like to pay for your household expenses. There are a few different approaches to combining money, and each has its pros and cons. Here are some ideas to help you get started: Proportional method In this approach, each member of the couple contributes to household expenses in line with what they earn. For example, if one partner earns $100,000 a year, which is 66 per cent of the household income, and the other earns $50,000, which is 33 per cent of the household income they would each contribute accordingly. That means, if the monthly bills come to $3000, then the higher earning partner pays $2000 (66 per cent), while the other partner pays $1000 (33 per cent). Pros: In this scenario, both partners spend the same percentage of their income towards bills, expenses and entertainment, while keeping what’s left over for themselves individually. That means you can both enjoy a better lifestyle than you could if you kept your money separate. It also relieves the stress of trying to keep up with a higher earning partner, or ‘budget down’ to the level of the lower earning partner. Cons: One possible drawback to this method is that the higher earning partner could start to feel resentful about contributing more, or you could get into disagreements about whether an expense should be joint, or personal. Equal shares In this system, expenses are split down the middle, regardless of who earns what. You keep the rest of your income to spend how you like. That means you’re also responsible for paying down debts you’ve racked up on your own – your finances are essentially separate. Pros: This is a great option for people who value their independence, especially in the early stages of a relationship. Neither partner feels like they are contributing too much, or being subsidised. Cons: If there’s a big disparity in incomes, this can limit your lifestyle to that of the lower earning partner. It’s also not a realistic way to manage many of life’s major events, for example, if you want to buy a home you’ll need all of your borrowing power. Or, if one partner needs to take time off work to have children, you’ll need to reassess the arrangement. Going all in Another option is to combine all of your finances. Couples who use this method only have joint bank accounts and credit cards, shared loans and so on. Each partner’s income is deposited into a joint account, and all of your household and personal expenses are paid from a joint account. Pros: Both partners have complete transparency over the household finances. It’s also simple to manage, as you don’t need to worry about splitting bills. Having an overview of your whole financial situation can also help with financial planning and money management. Cons: This approach can cause friction if your values and spending behaviour aren’t aligned. One partner can become resentful of the other’s spending, or, disagree with individual purchases they want to make. As you can see, there’s no right or wrong way for couples to share their money. The most important thing is to keep talking regularly about your finances, and review and alter your approach over time, as your needs change. Source: Money & Life

Everyone has financial goals. Maybe you want to pay off your mortgage early, stop relying on your credit cards, or go on an amazing overseas holiday (once we’re allowed to travel again). Or you might want to set up good money habits, like investing regularly or look at ways to grow your super. Whatever you want to achieve, it’s possible – as long as you approach your goals with the right mindset. There’s a lot of science behind what happens to your brain when you set goals. It can trigger new behaviours, increase your motivation and attention, and improve your self-confidence. What’s more, when you set goals that are ambitious, challenging and highly important to you, you’re much more likely to perform in a way that helps you achieve them. So, in other words, the best way to set yourself up for success is to make sure you choose the right financial goals and support them with a solid plan. Here are five steps that will help you get started. Step 1: Identify and write down your goals Goals are meaningless if they’re just vague ideas in your mind. That’s why new year resolutions always fail. Writing them down will help you focus on what you want. To make you even more accountable, share your goals with someone and update them on your progress. A 2015 study by psychologist Dr Gail Matthews showed that 76% of people who wrote down their goals and shared their progress were able to successfully achieve them, compared to a 42% success rate for people who didn’t write down or involve other people in their goals. Make a list of all the things you want to achieve financially and then prioritise them in order of their importance to you and your loved ones. You’ll find that two or three goals will stand out – they’re the ones to focus on. Step 2: Make them specific, measurable and realistic Now that you’ve decided on your goals, you need to expand on them so you know what you’re working towards. The best goals are specific, measurable and realistic. Set yourself a challenge, but don’t make your goals impossible to achieve. For example, consider this common financial goal: I want to pay off my mortgage earlier. That’s a great goal. But it doesn’t mean much if you don’t put parameters around it. Here’s a better example: I’m going to pay off my mortgage by December 2028. I will do this by paying an extra $500 each month on top of my minimum payment. This goal is much more specific, with a set deadline and regular actions you need to perform. Step 3: Have a plan Work out the actions you need to take to achieve your goals. Do you need to earn more? Spend less? Refinance your loan so you’re paying lower interest? Cut back on some non-essentials? Let’s revisit our earlier goal. We know we can achieve it by paying an extra $500 each month. But where is that money coming from, and what will you do with those extra payments? This needs to be part of your plan. For example: I’m going to pay off my mortgage by December 2028. I will do this by paying an extra $500 each month on top of my minimum payment and keeping that money in a mortgage offset account to reduce the amount of interest I pay. To ensure I have this money available each month, I will work to a monthly budget that minimises any unnecessary spending and I will increase my income by working two hours of overtime each week.  Everyone’s plan will be unique. The key is to make it relevant to your lifestyle to give yourself every chance of success. It’s also a good idea to allow for the occasional slip up in your plan. No-one is perfect. Step 4: Track your progress Big, long-term financial goals are great, but it’s easy to become overwhelmed by them. Breaking down bigger goals into smaller steps can help you track your progress and celebrate your success along the way. If you have a goal with a five-year deadline, break it down into five one-year goals. Or even monthly goals. That way you’ll know how you’re going and whether you need to make any adjustments to your behaviour. Reward yourself when you reach certain milestones – this can help keep you motivated and avoid splurging. Step 5: Revisit and refine your goals regularly No matter how determined you are to reach your financial goals, things may get in the way. You may have unexpected major expenses, or your priorities may change. That’s okay. Once you have the right behaviours and mindset of working towards a financial goal, you can adjust the goalposts whenever you need to. The process is far more important than the outcome. Along with tracking your progress and celebrating your small wins, revisit your larger financial goals regularly, Are they still your top priorities, and does your plan need to be updated? If you have a financial adviser, they can help you with this and let you know if you’re overreaching or if you could be striving for more. What financial goals do you want to work towards? Source: Colonial First State

When it comes to living a longer, healthier, more active lifestyle, a good approach can often involve easy tasks that you can turn into everyday habits – even when social distancing is on the agenda. If you’re after ideas, here are some ways you might sustain or even improve your physical and mental wellbeing, which is worth a thought, given the number of Aussies aged 85 and over is increasing. Get the blood pumping The Government Department of Health recommends older Aussies do at least 30 minutes of physical activity on most (preferably all) days and says it doesn’t necessarily have to be done at once. As for the benefits, the World Health Organization says regular physical activity has the potential to: reduce the risk of some cancers, coronary heart disease and diabetes reduce the risk of falls and hip fractures ease feelings of depression improve energy levels and weight management enhance muscular and cardiorespiratory fitness. If your local gym or aquatic centre is temporarily closed, remember you can still go for a walk, jog or cycle and there’s a range of online group classes available. Stay up to date with your appointments While many health issues can be aided by physical activity, you may still need to talk with your doctor, physiotherapist, podiatrist or local fitness centre about the type and amount of activity you can do. Remember, making time for regular check-ups is a great way to take care of your overall health and ensure you stay on top of any issues before they escalate. Due to COVID-19, there are also different options for accessing health services. For instance, you may be able to access bulk-billed appointments with your doctor, nurse or mental health professional via phone or videoconference. If you’d like to arrange a telehealth appointment, speak to your GP. Eat well and minimise the bickies With many of us having spent some time in lockdown this year, you may have heard a few people admit to packing on the ‘iso-weight’, with comfort food potentially making all of us feel a little better from time to time. Eating a nutritious diet, however, could help you reduce the risk of diet-related chronic diseases and improve your wellbeing if you’re living with an ongoing illness. Keep the brain ticking Researchers believe many supposed age-related changes are in fact lifestyle related. Memory loss, for instance, can reportedly be improved by 30% to 50% simply by keeping the brain active. You might be thinking – that’s not easy when you’ve been told to go out less, depending on where you live. So, if you’re feeling a little less motivated (and like many of us, want to spend less time in front of the TV and fridge), below are a few avenues that could be worth exploring Learn a new hobby – YOURLifeChoicesand About Over 50s have many ideas, including everything from fishing and photography, to gardening and chess. Up your tech skills – There are various community colleges and groups, such as ReadyTechGo, that offer a range of how-to workshops on everything from emails to social media. Enter online gaming – There are plenty of online forums available if you’re looking to play card games, trivia or bridge with neighbourhood and far away communities. Similarly, there are mobile apps, such as Words with Friends, where you can play with other people. Enrol in a free course – There are a variety of free online courses available through TAFE, as well as Open Universityif you’re wondering where to go. Go back to work – If you’re in a position to do so and you’ve been thinking about getting a part or full-time job, the website Older Workersmay have some suggestions.   Stay socially connected with people, or animals if you prefer them Older people who remain connected with others are likely to have better quality of life and delayed mental decline, while enjoying greater independence. If you’re looking for further ideas, you can check out activities and excursions through groups like Probus, or you may want to look into club associations through Rotary, Leagues and Surf Life Saving. If you’re keen on helping others (it could be at a soup kitchen, or animal shelter if cats and dogs are more your thing), you can also find a national database of opportunities at GoVolunteer. Give mindfulness a go The website Smiling Mind says mindfulness is paying attention to the present moment with openness, curiosity and without judgment. According to the website, mindfulness is proven to lead to better attention, memory, regulation of emotions and self-awareness. In turn, improvements in these areas can lead to reduced stress, anxiety and depression, better academic skills, social skills and self-esteem. Smiling Mind is one of many free meditation resources you can tap into if you’re looking for tools developed by psychologists and educators. Reach out and talk to someone if you’re struggling Hopefully the ideas above provide some food for thought. Meanwhile, if you’re struggling a bit and would like to talk to someone, you can access free support through Beyond Blue (1800 512 348) and Lifeline (13 11 14). Source: AMP

Go back a month or two and you’d be forgiven for thinking we were on the fast track to pay rises all round. The unemployment rate fell to its lowest level in a decade in June, at 4.9 per cent, as government stimulus spending, closed national borders and zero community COVID-19 fuelled a post-pandemic recovery. Fast forward a few months and the outlook is more uncertain. As the pandemic has shown us time and time again, COVID-19 is an unpredictable beast. Large parts of the country have been plunged into extended lockdowns to combat outbreaks of the Delta strain. As a result, every state and territory experienced a fall in payroll jobs in the first half of July, with NSW the worst hit, down 4.4 per cent. What’s the outlook for jobs? Economists are now forecasting the jobless rate to rise and the economy to contract in the September quarter. The Commonwealth Bank of Australia has forecast 300,000 job losses in Sydney alone, with unemployment peaking at 5.6 per cent in October. But it’s not all doom and gloom, especially for those states that have had brief, or no, lockdowns. And some sectors continue to thrive, despite, or perhaps because of, the pandemic. Which industries are recruiting? So if you’re looking for a new job, which industries are hiring? Recruitment firm Hays surveyed 3500 employers for their FY 20/21 salary guide. Their findings confirmed strong hiring intentions in several sectors, with almost half of employers (47%) planning to grow their permanent headcount over the next 12 months. Unsurprisingly, the life sciences industry was among those with a “huge need for staff”, with 61 per cent of employers planning to add more permanent jobs in the next year. They were followed by the legal industry, contact centres, technology, engineering and human resources, which all planned to add more headcount. The construction industry is also doing well, as anyone who has tried to get a tradesperson to their house will tell you. “With employers intending to expand their workforce, in some areas the demand for skills now exceeds supply,” says Hays. “Add border closures, which severely limit the supply of skilled professionals into the country, and the supply and demand imbalance has tipped in favour of candidates.” Hays also found that more than two thirds of employers (67%) plan to offer pay increases in the next round of reviews; but they’ll be less than employees want.     What’s the impact of closed borders? While businesses aren’t splashing too much cash on salary increases just yet, the tide may turn in the coming year. With the international border closed, the pool of available workers is tightening. Economists say that could eventually lead to higher wages, as employers are forced to compete for talent. Around 250,000 overseas workers have left the country since the beginning of the pandemic, according to Reserve Bank of Australia governor Dr Philip Lowe. “If the borders remain completely closed and we can’t get workers into the country that are needed for firms to expand and invest, then I think we will see more wages growth,” he said. This outlook really does rely on the border staying closed for some time, which may not happen if vaccination rates reach the federal government’s 80 per cent target within the next year. So what should workers do? With all the uncertainty about, is it still a good time to change jobs? If you’re unhappy at work, or feel like your career growth has stalled, it’s always worth looking around. Depending on your profession, you might be surprised by the opportunities on offer. Consider also using this time to upskill and make yourself more attractive to employers. While the outlook isn’t quite as rosy as it was just a few months ago, the COVID-19 pandemic is nothing if not unpredictable. With the global economy opening up again, there’s sure to be more demand for Aussie goods and services in the very near future.   Source: Money and Life

Conventional wisdom used to dictate Australians were better paying off their home loans, and then, once debt-free turning their attention to building up their super. But with interest rates at record lows and many super funds potentially offering a higher rate of return, what’s the right strategy in the current market? One thing to consider is the interest rate on your home loan, in comparison to the rate of return on your super fund.  As banks follow the RBA’s lead in reducing interest rates, you may find the returns you get in your super fund are potentially higher. Super is also built on compounding interest. A dollar invested in super today may significantly grow over time. Keep in mind that the return you receive from your super fund in the current market may be different to returns you receive in the future. Markets go up and down and without a crystal ball, it’s impossible to accurately predict how much money you’ll make on your investment. Each dollar going into the mortgage is from ‘after-tax’ dollars, whereas contributions into super can be made in ‘pre-tax’ dollars. For the majority of Australians, saving into super will reduce their overall tax bill – remembering that pre-tax contributions are capped at $27,500 annually and taxed at 15% by the government (30% if you earn over $250,000) when they enter the fund. So, with all that in mind, how does it stack up against paying off your home loan? There are a couple of things you need to weigh up. Consider the size of your loan and how long you have left to pay it off A dollar saved into your mortgage right at the beginning of a 30-year loan will have a much greater impact than a dollar saved right at the end. The interest on a home loan is calculated daily The more you pay off early, the less interest you pay over time. In a low interest rate environment many homeowners, particularly those who bought a home some time ago on a variable rate, will now be paying much less each month for their home. Offset or redraw facility If you have an offset or redraw facility attached to your mortgage you can also access extra savings at call if you need them. This is different to super where you can’t touch your earnings until preservation age or certain conditions of release are met. Don’t discount the ‘emotional’ aspect here as well. Many individuals may prefer paying off their home sooner rather than later and welcome the peace of mind that comes with clearing this debt. Only then will they feel comfortable in adding to their super. Before making a decision, it’s also important to weigh up your stage in life, particularly your age and your appetite for risk. Whatever strategy you choose you’ll need to regularly review your options if you’re making regular voluntary super contributions or extra mortgage repayments. As bank interest rates move and markets fluctuate, the strategy you choose today may be different from the one that is right for you in the future. Source: AMP

An effective way of building your super savings (and potentially reducing your taxable income) is through salary sacrificing – that is, asking your employer to put some of your before-tax income directly into your super fund. The amount you salary sacrifice is on top of the Super Guarantee (SG) contributions your employer must pay which increased to 10% on 1 July 2021. Why should I consider salary sacrificing into super? Build your super faster Making extra payments into your super can help build your super savings more quickly. What’s more, the longer you have your money invested, the more you will enjoy the benefits of compound interest. For your super account, this means the investment return is generated on the returns you’ve already earned. Pay less income tax If you choose to reduce your before tax income by salary sacrificing into super, you may be able to reduce what you pay in income tax for the financial year. You only pay 15% tax on contributions made through a salary sacrifice arrangement if you earn under $250,000 a year or 30% if you earn over $250,000 a year. This tax is likely to be less than your marginal tax rate, which you can find on the Australian Taxation Office (ATO) website. How much should I contribute? Every year, you can make up to $27,500 of concessional contributions to you super without incurring extra tax. Some people can contribute more if they are eligible for ‘Carry-forward unused concessional contributions’. It’s important to note that other contributions count toward your concessional contributions can include SG contributions made by your employer and contributions you make using after tax dollars and where you claim a tax deduction. To work out the right amount for you: Check to see how much super your employer pays. Work out your day-to-day expenses now to decide how much you reasonably put aside for retirement (even if it’s only a small amount – every bit counts). Make sure that the total of your concessional contributions don’t go over your concessional contributions cap, or you could end up paying extra tax. How Kevin saved on tax Kevin earns $1,100 a week ($57,200 a year) before tax. He decides to salary sacrifice $40 a week. This means his income tax will be calculated on the $1,060/week he now receives ($55,120 a year). If Kevin didn’t salary sacrifice, the estimated tax on his salary of $57,200 would be $8,979. After salary sacrificing, he only has to pay $8,230 in tax. The money he put into super is only taxed at 15%, rather than Kevin’s marginal rate, which is 32.5%. How Janine stayed on budget and under the contributions cap Janine earns a salary of $120,000. Her employer pays an SG of 10% of her salary, which is $12,000 a year. Janine can make up to $15,500 worth of concessional contributions into her super through salary sacrifice without going over the concessional contribution cap of $27,500. Janine works out that she can afford to sacrifice $80 a week of her before-tax salary – that’s $4,160 a year. In total, she’ll make $16,160 in concessional contributions, which keeps her under the $27,500 cap. Over 10 years, at this rate Janine would have boosted her super by an extra $41,600. How do I set up salary sacrifice? It’s always a good idea to speak to your financial adviser and see if a salary sacrifice arrangement is right for you. Things to consider if you decide to salary sacrifice into super: Check your employer offers salary sacrifice. Decide how much you’d like to sacrifice into super. Notify your employer and get the agreement in writing Make sure you don’t exceed the concessional contributions cap What else you should know Before you salary sacrifice, it’s important to remember that super is a long term investment and you can’t access this money until you reach age 65, or meet another condition of release (such as financial hardship). If your employer doesn’t offer salary sacrifice, there are other ways you can contribute into super.   Source: Colonial First State