How salary sacrifice works
With salary sacrifice, your employer pays part of your pre-tax salary straight into super. You don't pay income tax or the Medicare levy on that amount. Instead, your super fund pays 15% contributions tax. If your marginal tax rate is higher than 15%, you come out ahead.
Example: on a $90,000 salary, sacrificing $200 a fortnight ($5,200 a year) reduces your take-home pay by about $136 a fortnight, or $3,536 a year. But $4,420 goes into your super after tax, so you're $884 a year better off overall.
What $5,000 a year of salary sacrifice is worth
| Salary | Less take-home pay | Extra in super | You're better off by |
|---|---|---|---|
| $50,000 | $3,325 | $4,250 | $925 |
| $60,000 | $3,325 | $4,250 | $925 |
| $80,000 | $3,400 | $4,250 | $850 |
| $100,000 | $3,400 | $4,250 | $850 |
| $120,000 | $3,400 | $4,250 | $850 |
| $150,000 | $3,050 | $4,250 | $1,200 |
| $180,000 | $3,050 | $4,250 | $1,200 |
2026–27 resident rates, including the low income tax offset and 2% Medicare levy, no HELP debt.
The $32,500 concessional cap
From 1 July 2026, you can put up to $32,500 a year into super at the 15% rate. That includes your employer's 12% super guarantee. On a $100,000 salary, your employer already pays $12,000, so you can sacrifice up to $20,500 more.
If your total super balance was under $500,000 on 30 June last year, you can also use any unused cap from the previous 5 years. If your income plus concessional contributions is over $250,000, Division 293 tax adds another 15% on some contributions.
Who salary sacrifice suits
- Earning over $45,000: your marginal rate is at least 30% plus Medicare, so each dollar saves 15 cents or more.
- Earning under $37,000: usually not worth it. The low income super tax offset already refunds up to $500 of contributions tax, and your tax rate is low.
- Need the money soon? Super is locked away until you retire, except through the First Home Super Saver scheme.
Check your take-home pay without salary sacrifice in the salary calculator.
Using super to save for your first home
The First Home Super Saver scheme lets you withdraw voluntary super contributions for a first home deposit: up to $15,000 from each year and $50,000 in total, plus earnings. 85% of salary sacrificed amounts can be released. Combine it with your state's first home buyer grants.
Common questions
Is salary sacrificing into super worth it?
For most people earning over $45,000, yes, if you won't need the money before retirement. Each dollar you sacrifice is taxed at 15% in super instead of your marginal rate of 30% or more, plus the 2% Medicare levy.
What is the concessional contributions cap for 2026–27?
It's $32,500, up from $30,000. It includes your employer's 12% super guarantee, salary sacrifice and any personal contributions you claim a tax deduction for.
Does salary sacrifice reduce my super guarantee?
No. Since 1 January 2020, your employer must calculate the 12% super guarantee on your salary before salary sacrifice.
Does salary sacrifice reduce my HECS repayments?
No. Salary sacrifice contributions are reportable super contributions, which are added back to your repayment income.
Can I use salary sacrifice to save for a home deposit?
Yes, through the First Home Super Saver scheme. You can release up to $15,000 of voluntary contributions per year, and $50,000 in total, with 85% of salary sacrificed amounts eligible to come out.
What happens if I go over the cap?
The excess is added to your taxable income and taxed at your marginal rate, with a 15% offset for the tax already paid in super. If your total super balance was under $500,000, you may be able to use unused cap from the last 5 years.
This is general information, not personal financial advice. Sources: ATO contributions caps; ATO First Home Super Saver scheme.