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8.12 Salary Sacrifice

Last amended 
15 August 2017

Salary amounts which employees sacrifice in favour of other non-cash fringe benefits, such as additional superannuation, vehicles, and other conditions, are not exempt from assessment as AE.  In some instances, such as with superannuation, the sacrificed amounts are deferred and may not be received for several years.  Nevertheless, as they are earned and derived from the person's employment, they are assessed as income at the time they are earned.

The gross amount of salary should be used as actual earnings.  This is the amount prior to any salary sacrifice deductions. 

Example – Salary sacrifice

John earns $2,654.00 per fortnight gross and he pays $300.00 per fortnight into a private superannuation fund.  His taxable income is $2,354.00 but we would consider the gross amount of $2,654.00 as his actual earnings.