Salary Sacrifice & Packaging Abroad
Does salary sacrifice into super still make sense when you're posted overseas? Compare the tax savings under different scenarios.
Key rule: Salary sacrifice into super is only beneficial if you're paying Australian income tax. For non-residents, the tax rate starts at 32.5% from the first dollar — so salary sacrifice saving is even larger. But you must be earning AU-sourced assessable income.
Your Details
Key Limits (2024–25)
| Item | Limit |
|---|---|
| Concessional contributions cap | $30,000 per year (includes SGC + salary sacrifice) |
| Carry-forward unused cap | Available if balance <$500,000 (up to 5 years unused) |
| Division 293 tax | Additional 15% if income + contributions >$250,000 |
| Non-concessional cap | $120,000 per year (or $360,000 bring-forward) |
Considerations for Expats
- Overseas employer: If you work for a non-AU employer, salary sacrifice into AU super isn't typically available. Consider personal deductible contributions instead (s290-170 notice required).
- FBT on overseas postings: Employer-provided benefits (housing, school fees) may be FBT-exempt under the Living Away From Home Allowance (LAFHA) for the first 12 months.
- Tax equalisation: Many multinational employers offer tax equalisation — you pay the same tax as if you were in Australia, and the employer covers any foreign tax difference.
- Double contribution risk: If you're contributing to both AU super and a foreign pension, ensure total concessional contributions don't exceed the $30,000 cap.
Carry-forward strategy: If you've been abroad for several years without making concessional contributions, you may have up to $150,000 of unused cap ($30,000 × 5 years) available when you return. This is a powerful catch-up tool.