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http://www.human-resources.utas.edu.au/

This site is no longer being updated, but will remain live until 27 November 2009. Please update any bookmarks and enjoy using the new site.

Example

An employee elects to receive a pay-out of long service leave which has a gross value of $1,000. Although this $1,000 payment cannot be salary sacrificed and paid directly into the employee's superannuation account as an employer contribution (from pre-tax salary), the following arrangements achieve the same result:

1. The employee receives a gross payment of $1,000 for a long service leave pay-out as salary and has tax deducted.
   
2. The employee can then salary sacrifice an equivalent amount of gross salary ($1,000) over (for example) the next 2 pays directly into superannuation. Therefore, for each of those 2 pays, gross salary would be reduced by $500 with a consequent reduction in tax payable for those 2 fortnights.

The end result being:

• The employee's taxable earnings have remained the same ($1,000 added by the LSL payout, and $1,000 salary sacrificed into superannuation).
• $1,000 (less the 15% employer contribution tax) has been paid into the employee's superannution account.