Salary sacrifice into super
Putting pre-tax pay into super is taxed at just 15%. See how much tax you'd save — and how much extra lands in your super.
Sacrificing $6,000 a year saves you
$1,020
in tax a year — taxed at 15% in super instead of your 32% marginal rate.
$5,100
$4,080
$5,100
Concessional (pre-tax) contributions are taxed at 15% (30% if your income tops $250k). The money is locked in super until 60. Stay within the $32,500 annual cap (including employer super). A guide, not financial advice.
Salary sacrifice is an arrangement with your employer to redirect part of your before-tax pay into super instead of your bank account. Because contributions made this way are taxed at 15% on the way into the fund rather than at your marginal rate, the same pre-tax dollar buys you more retirement savings — the catch being that it's locked away until you retire.
How big that gap is depends on which tax bracket you sit in. Two limits also matter: an annual cap on concessional contributions that counts your employer's super as well as yours, and a higher contributions tax rate once your income passes a certain point. Both are worked through below.
How this is calculated
- 1
Find your marginal rate
Your salary is matched to the top resident tax bracket it reaches for 2026-27, plus the 2% Medicare levy once you clear the low-income levy threshold. That combined rate is what the sacrificed dollars would otherwise face.
- 2
Split the sacrificed amount three ways
The monthly figure is annualised, then divided: your pay falls by the amount less your marginal rate, the fund receives it less 15% contributions tax, and the gap between those rates is the tax you save.
- 3
Check it against the concessional cap
Your employer's Super Guarantee, modelled at 12% of salary, is added to your sacrifice and compared with the $32,500 concessional cap for 2026-27. The advanced section adds unused cap carried forward from the previous five years, usable only if your total super balance was under $500,000.
- 4
Test for Division 293
Salary plus employer super is measured against the $250,000 Division 293 threshold. Above that line, part of your concessional contributions is taxed at 30% instead of 15%, shown separately rather than netted off the headline saving.
- 5
Project it to retirement
The long-run view compounds your balance in today's dollars at a 5% real return, comparing employer contributions alone, your current sacrifice, and filling the cap every year to age 60 or 67.
What it assumes
- Your marginal rate is held flat at the rate your current salary reaches. If sacrificing enough drops you into a lower bracket, the real saving is a little smaller.
- Only your salary and your sacrifice count towards the cap. Personal deductible contributions, super from a second job or employer contributions above 12% need adding in yourself.
- It assumes your employer keeps calculating Super Guarantee on your full salary, and that the arrangement is set up before you earn the pay.
- The headline figure is income tax only. HECS/HELP, the Medicare levy surcharge and income-tested family payments all add sacrificed amounts back, so those don't fall.
- The projection treats the 5% real return as already net of fees, insurance premiums and fund earnings tax, and holds your salary flat in real terms.
Common questions
Does salary sacrificing reduce my HECS/HELP repayment?
No. Sacrificed amounts are reportable employer super contributions and get added back when your study loan repayment income is worked out — the same applies to the Medicare levy surcharge. The saving here is income tax only.
What happens if I go over the concessional cap?
Excess concessional contributions are added back to your taxable income and taxed at your marginal rate, with a 15% offset for the contributions tax your fund already paid. You aren't taxed twice, but the advantage disappears for that portion.
Is this the same as claiming a deduction for a personal contribution?
For tax they land in much the same place: both are concessional contributions taxed at 15% in the fund, and both count against the same cap. The difference is process — sacrifice is agreed with your employer beforehand, while a personal deductible contribution comes from pay you've already received and is claimed with a notice of intent to your fund.
Is it still worth doing on a high income?
Once Division 293 applies, concessional contributions are taxed at 30% rather than 15%. That's a much smaller win, but still well under the top marginal rate plus the Medicare levy.
When can I get the money back?
Contributions are preserved until you reach preservation age — 60 for anyone approaching retirement now — and meet a condition of release. The main exception is the First Home Super Saver scheme, which releases eligible voluntary contributions towards a first home.
Sources: ATO — tax rates for Australian residents · ATO — Medicare levy surcharge thresholds · All data sources
See also: Take-home pay · Boost my super · Mortgage vs super vs shares · Am I on track?
General information only, not financial advice. Figures are estimates based on the inputs and assumptions above and don't account for your personal circumstances. Confirm anything important with the relevant authority or a licensed adviser.