Salary Sacrifice Agreement Letter Template

A salary sacrifice involves an employee giving up a right to receive part of their cash salary in exchange for a defined non-cash benefit. The salary sacrifice agreement letter (request to make ongoing reductions from pay) comes in two parts. Part one is the confirmation of the agreement from the employer to the employee which also sets out the terms and conditions of the agreement, and part two is the request form from the employee to the employer confirming their agreement to the salary sacrifice arrangement (also sometimes known as an optional remuneration arrangement).

This Salary Sacrifice Agreement is an agreement for an arrangement between an employer and an employee, whereby the employee agrees to forego part of their future entitlement to salary or wages in return for the employer providing them with non-cash benefits of a similar value.

The Salary Sacrifice Agreement must be made prior to receiving or becoming entitled to receive the benefits. Past remuneration cannot be subject to salary sacrifice. This Salary Sacrifice Agreement includes the following provisions:

1. Salary Sacrifice Definition
2. Benefits to be Sacrificed
3. Commencement of This Agreement
4. Termination of This Agreement
5. Financial Advice

HR Expert Australia recommends: This is a complex document which involves the creation of complex legal rights and obligations and may give rise to various taxation and liability consequences. The best way to use this document is to complete it, print it out, read it carefully and instruct lawyers to assist you in the finalisation of the document and that you take tax advice from your accountant or tax adviser as to any income tax, capital gains or GST consequences.