Salary sacrificing is a financially savvy way to reduce your taxable income by purchasing certain goods or services using your pre-tax salary.
Also known as salary packaging, salary sacrifice is an arrangement between you, your employer and the provider of goods or services. Salary sacrifice allows you to “sacrifice” some of your salary to pay for items using pre-tax dollars, effectively reducing your taxable income and putting more money in your pocket each pay day. It is a good alternative to buying a car outright or getting a car loan.
Buying a new or used can with your pre-tax income is a popular method of salary sacrificing, because you can roll your vehicle expenses into a single payment that is deducted from your salary before tax. This method of salary sacrificing is called a novated lease.