How it works
You agree with your employer to take part of your salary as super instead of pay. That money isn’t taxed as income. Instead, your super fund pays 15% contributions tax on it. If your marginal rate plus the 2% Medicare levy is more than 15%, you come out ahead.
Your employer still pays the 12% super guarantee on your full salary, before the sacrifice.
- Income tax $3,000 less
- No salary sacrifice: $20,520 $10,000 sacrificed: $17,520
- Medicare levy $200 less
- No salary sacrifice: $2,000 $10,000 sacrificed: $1,800
$10,000 into super costs you $6,800 of take-home pay
Your fund pays 15% contributions tax, so $8,500 lands in your super. You're $1,700 better off than taking it as pay.
Is it worth it at my income?
Sacrificing $5,000 puts $4,250 into your super after contributions tax. What it costs you depends on your income:
| Salary | Take-home pay falls by | You’re ahead by |
|---|---|---|
| $40,000 | $4,024 | $226 |
| $60,000 | $3,325 | $925 |
| $100,000 | $3,400 | $850 |
| $150,000 | $3,050 | $1,200 |
| $200,000 | $2,650 | $1,600 |
2026–27, with the Medicare levy. On $60,000 the gain is a little higher than on $100,000, because sacrificing also gets you more of the low income tax offset.
On low incomes the saving is small. If your income is $37,000 or less, the government refunds the 15% contributions tax on your before-tax contributions, up to $500, through the low income super tax offset. From 1 July 2027 that rises to $810, for incomes up to $45,000.
The caps
| 2026–27 | Cap | What counts |
|---|---|---|
| Concessional (before tax) | $32,500 | Employer super guarantee, salary sacrifice, personal deductible contributions |
| Non-concessional (after tax) | $130,000 | Money you put in from after-tax pay or savings |
On a $100,000 salary, your employer’s 12% super guarantee is $12,000, so you could salary sacrifice up to $20,500 more.
Catch-up contributions: if your total super balance was under $500,000 on 30 June last year, you can use unused concessional cap from the past five years. That’s useful after a career break, or in a year with a big bonus or a capital gain.
Non-concessional: you can bring forward up to three years of the cap ($390,000) if you’re under 75 and your total super balance is under $1.84 million. From $2.1 million, the cap is nil.
Things to know
- High incomes: if your income plus concessional contributions is over $250,000, you pay an extra 15% (Division 293 tax) on the contributions, so 30% in total. It’s still less than the top marginal rate.
- Locked away: you can usually only take super out from 60, once you retire.
- HELP repayments and the Medicare levy surcharge are worked out with sacrificed super added back, so salary sacrifice doesn’t lower them.
- No employer scheme? You can make a personal contribution and claim a tax deduction for it, by giving your fund a notice of intent before you lodge your tax return. The tax result is the same.
See your own numbers
The pay calculator shows your take-home pay with salary sacrifice, and the super calculator what your super could grow to by retirement.