What is a super salary sacrifice arrangement? | HR Expert Australia
Call us on 1300 100 447
Blog

What is a super salary sacrifice arrangement?

The ATO specifies that a super salary sacrifice arrangement is a formal arrangement between an employer and an employee where the employee agrees to forgo part of their future entitlement to salary or wages.

The golden rule to remember is that an arrangement should be confirmed and entered into before the applicable work is performed.

Can you salary sacrifice unused leave on termination?

The short and most common answer is no.

Accrued leave entitlements are deemed part of salary and wages that have already been earned and therefore you are unable to salary sacrifice it.

However, let’s not move on just yet. If an employee was to have a written arrangement in place prior to the leave accruing then this would be an instance where it can be salary sacrificed on termination.

It is important to note that only the portion that was accrued after the arrangement was put into place can be salary sacrificed.

What else do you need to consider?

Upcoming bonuses, commissions and incentives follow the same rule above. An arrangement would need to be put into place prior to the work that was required to earn these allowances.

Disclaimer

Information provided in this article is general information, not legal advice and should not be relied upon as such. HR Expert Australia and Definitiv (the author) does not accept liability for any loss or damage arising from reliance on the content of this article.

This article was originally posted on Definitiv, one of Australia’s leading cloud-based payroll and HR software products. To view the original article, click here.

This entry has 0 replies

Leave a Reply

Your email address will not be published. Required fields are marked *

Testimonials

  • "Our new Human Resources systems and processes are working extremely well. What we love is the ease of implementing HR Expert Australia's pre-designed templates and documents into our business. We can highly recommend HR Expert Australia."
    Kristy Johnson
    Managing Director | Designs by Boo Shi
  • "HR Expert Australia is a great solution for the management of our team. The resources on the site are fully customisable and straightforward to implement."
    Joe Purves
    Founder and CEO, Green Finder, Australia
  • "HR Expert Australia made updating our HR documentation a simple and easy process. There was no need to hire expensive consultants and we saved thousands. HR Expert Australia provides a single reference source for all of your HR information needs."
    Louise Hoggett
    Director
  • "HR Expert Australia and the online tools are like no other. It makes managing our people and business easy. It’s updates always ensure we are up to date with compliance requirements and enables us to focus on management rather than implementation. I would highly recommend this service to any size business."
    Dr Baljit Lalli
    Director/Principal Orthodontist, Pittwater and Macarthur Orthodontics, Sydney Australia