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Salary sacrifice

A salary sacrifice is the conversion of a cash component of a salary package into some other kind of remuneration. It is liable for payroll tax as a payment in 'cash or in kind for the services of an employee as such'.

Payments into a superannuation fund are liable as a superannuation contribution.

Payments which are a fringe benefit under the Fringe Benefits Tax Assessment Act have a grossed up liable value as determined by that act.

When a salary sacrifice is an ineffective (after income tax is calculated) sacrifice the full value of the remuneration is liable as wages and is not broken down and returned as different components.