Salary sacrifice

PSSap Ancillary account

Contributing PSS members can now contribute to their PSSap Ancillary account in the following ways:

New eligible contributions

  • personal (after tax) contributions;
  • spouse contributions;

This is in addition to

  • salary sacrifice;
  • rollovers;
  • post 1995 accumulation transfer amounts (PSS members only).

Personal and spouse contributions can be made via BPAY, cheque and money order.

For details visit pssap.gov.au/super/ancillary-membership

Joining PSSap as an Ancillary Member will not change your PSS membership or final PSS benefit calculation in any way. It means that you will be a member of two government super schemes – the PSS and PSSap. Your final PSSap benefit will be entirely separate to your PSS benefit.

Salary sacrifice is an arrangement between you and your employer allowing you to pay some of your before-tax salary into your super. It can be a tax effective way to build extra super, helping to supplement your primary benefit from PSS in retirement.

Salary sacrifice contributions into PSS are not allowed under the scheme's rules. However, if you are a contributing PSS member, you can now choose to salary sacrifice into PSSap, building more wealth in the Australian Government super environment. Read the Salary sacrifice [PDF 351 KB] factsheet for more information.

To salary sacrifice into PSSap, you must first join PSSap as an Ancillary Member. See Ancillary membership on the PSSap website for information on how to join.

Benefits of salary sacrifice

  • Before-tax super contributions are taxed, but only at 15%.
  • This means that if your income is taxed at more than 15% (rates range up to 47%), you will pay less tax (only 15%) on any before-tax contribution you make.
  • If you normally pay 47% income tax, you will only pay 15% on any before-tax super contributions you make.  That’s a difference of 32%. The 32% you would have paid in tax will instead go straight into your super account and be invested for your retirement.

Does this mean I get paid less each week?

If you salary sacrifice super contributions you will have less take-home pay each fortnight, but provided your personal tax rate is greater than 15%, the amount going into your super will be more than the amount your lose in take home pay.

The amount you decide to contribute is entirely up to you, so you can make sure it’s affordable within your budget.

Superannuation is about planning for retirement. A small change today can mean a big difference to your retirement lifestyle. Salary sacrificing an extra $100 per fortnight into super over 20 years could put you ahead by $63,543.*

Things you need to know

  • The higher your income tax rate, the more benefit you get. The benefits for those earning less than $37,000 per year are limited.
  • Your employer may have a cap on the amount you are allowed to salary sacrifice. Be sure not to exceed this amount.
  • You should talk to your employer to make sure that you understand whether salary sacrificing amounts into super will  impact on any other element of your remuneration.
  • There is a limit on before-tax super contributions. See more information on contribution caps via the ATO website.
  • Contributions into super generally must remain within super until you retire so you need to weigh up the benefits of extra  super against other priorities, and you should take into account your objectives, financial situation and needs before  making financial decisions.

How do I set it up?

  1. Check whether your employer allows you to salary sacrifice into super. Most departments and agencies allow salary  sacrificing but it’s best to confirm with your personnel/HR section.
  2. Complete the Apply to join PSSap as an Ancillary Member [PDF 878 KB] form.
  3. Instruct your employer to deduct your nominated salary sacrifice amount from your regular pay. Once it’s set up, the nominated amount will automatically be deducted from your salary and deposited into your PSSap Ancillary account until you ask them to stop.
Key features of a PSSap Ancillary membership
Type of scheme Profit for members meaning net investment returns are returned to members
Eligible contributions/rollovers (for contributing PSS members)
  • Salary sacrifice
  • Personal (after-tax) contributions
  • Spouse contributions
  • Rollovers from other super
  • Accumulated transfer amounts (post 1995) (contributing or preserved)
Investment choice

One or a mix of up to four investment options:

  1. Cash
  2. Income Focused
  3. Balanced
  4. Aggressive

You must choose an investment option when you join.

Insurance cover

From 1 October 2016, PSSap Ancillary members will be able to apply for lifePLUS choice cover.

Fees and costs
  • Administration fee: $5 per month ($60 per year)
  • Exit fee: $50 per withdrawal
  • Investment management fees: estimated at 0.14% - 1.12% per annum based on the fund’s total assets
Investment switches
  • First two investment option switches are free each financial year
  • $20 for each subsequent switch in that year
Keeping you informed
  • Online account management
  • Annual member statement
  • Customer Information Centre

download Complete the PSSap ancillary membership form