Adding before tax money to super

Adding before tax money to your super is also known as salary sacrifice. This is additional money your employer adds to your super from your pay before they deduct your income tax. The limit or cap on before tax money you can contribute to super, and be taxed at the low super tax rate is $25,000 per year.

Adding before tax money to your super is a good strategy to grow your savings while reducing your tax bill (if your tax rate is above 15%).

If you earn below $37,000 making before tax contributions may not be as effective because the tax you pay on your salary isn't much more than the tax paid on your super contributions. A more effective strategy may be taking advantage of the government co-contribution.