Salary sacrifice or personal deductible contributions, what’s better
let’s look at those two strategies from the point of pluses and minuses for each, and that might help you decide which one will work for you better: salary sacrifice or personal deductible contributions.
Benefits of the salary sacrifice arrangement:
No brainer discipline
No forms are required
Dollar cost averaging
Negatives of salary sacrifice:
Some employers do not provide the salary sacrifice facility,
Salary sacrifice only works for income to be earned and not the income earned already
Easy prospect of excess concessional contributions
Salary sacrifice can affect your income protection insurance
Salary sacrifice contributions could be redirected to a different super fund
Uncertain frequency of contributions
Benefits of personal deductible contributions
Meeting eligibility rules
Flexibility of timing of your contributions
Super fund of your choice
No impact on your insurance within super, especially Income Protection
Control not to exceed the concessional contribution cap for the year
Negatives of the personal deductible contribution:
Notice of intent to claim the tax deduction
Here it is, a comprehensive comparison of the salary sacrifice contributions versus personal deductible contributions. So, which one is the winner for you? Which one do you think would work for you best?
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