What is salary sacrifice into super?

Salary sacrifice into super is an arrangement where you ask your employer to pay part of your pre-tax salary directly into your superannuation fund. Instead of paying income tax at your marginal rate (up to 45% plus Medicare levy), the sacrificed amount is taxed at just 15% as a concessional super contribution. This can result in significant tax savings, especially for those on higher marginal rates.

What is the concessional contributions cap for 2025-26?

The concessional (before-tax) contributions cap for 2025-26 is $30,000 per financial year. This cap includes all concessional contributions: employer Superannuation Guarantee (SG) at 12%, salary sacrifice contributions, and any personal contributions you claim as a tax deduction. Contributions above the cap are included in your assessable income and taxed at your marginal rate, plus an interest charge.

Can I carry forward unused concessional cap amounts?

Yes. If your total super balance was less than $500,000 on 30 June of the previous financial year, you can carry forward unused concessional cap amounts from up to 5 prior financial years. This allows you to make larger concessional contributions in a single year — for example, if you receive a large bonus or have a high-income year.

How much tax do I save with salary sacrifice?

The tax saving depends on your marginal tax rate. If you're in the 30% bracket (income $45,001-$135,000), you save approximately 17% on the sacrificed amount (30% + 2% Medicare levy minus 15% contributions tax = 17%). If you're in the 37% bracket, you save approximately 24%. If you're in the 45% bracket, you save approximately 32%. The trade-off is that your take-home pay is reduced and the money is locked in super until preservation age.

Does salary sacrifice reduce my take-home pay?

Yes, salary sacrifice reduces your take-home pay because the sacrificed amount goes directly to your super fund instead of into your bank account. However, the reduction in take-home pay is less than the amount sacrificed because you also pay less income tax. For example, sacrificing $500 per fortnight might only reduce your take-home pay by $340-$400 depending on your tax bracket.

What is Division 293 tax?

Division 293 is an additional 15% tax on concessional super contributions for individuals whose income plus concessional contributions exceeds $250,000. This effectively doubles the super contributions tax from 15% to 30% on the amount over the threshold, reducing the tax advantage of salary sacrifice for very high income earners.

Salary Sacrifice Super Calculator 2025-26

See how much tax you save by salary sacrificing into super. This calculator compares your take-home pay and tax with and without salary sacrifice, including the 15% super contributions tax and concessional cap check.

Last verified: 21 May 2026

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How Salary Sacrifice Into Super Works

Salary sacrifice is one of the most effective ways to reduce your tax bill and boost your retirement savings. By directing part of your pre-tax salary into your super fund, you pay just 15% contributions tax on that amount instead of your marginal income tax rate (which could be up to 47% including Medicare levy).

How it works

You make an agreement with your employer to redirect a portion of your salary to your super fund before income tax is calculated. This reduces your taxable income and therefore your income tax. The sacrificed amount is taxed at 15% inside the super fund as a concessional contribution.

The concessional contributions cap

For 2025-26, the concessional contributions cap is $30,000 per financial year. This cap covers all before-tax super contributions combined:

Employer Superannuation Guarantee (SG) at 12%
Salary sacrifice contributions
Personal contributions claimed as a tax deduction

For example, if your salary is $85,000, your employer contributes $10,200 in SG. That leaves $19,800 of cap space for salary sacrifice. Going over the cap means the excess is added to your assessable income and taxed at your marginal rate, plus an interest charge.

Tax saving by bracket

$18,201 - $45,000 (16% bracket): Save 3% per dollar sacrificed (16% + 2% Medicare - 15% super tax)
$45,001 - $135,000 (30% bracket): Save 17% per dollar sacrificed
$135,001 - $190,000 (37% bracket): Save 24% per dollar sacrificed
$190,001+ (45% bracket): Save 32% per dollar sacrificed

Important considerations

Money in super is locked until you reach preservation age (currently 60 for most people)
Salary sacrifice can affect government benefits, Centrelink payments, and HECS-HELP repayments
Division 293 tax applies an extra 15% on concessional contributions if your income plus contributions exceeds $250,000
You must arrange salary sacrifice with your employer before the income is earned — you cannot sacrifice income already received

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FairWork Mate is an independent commercial service. We are not affiliated with, endorsed by, or associated with the Fair Work Ombudsman, the Fair Work Commission, or any Australian Government agency. Content is general information and estimates only — not legal, financial, or tax advice. Always verify with the Fair Work Ombudsman (13 13 94) or a qualified professional.

From the Mate Network

Full Tax Bracket Breakdown →

See exactly how much tax falls in each bracket, plus Medicare levy and offsets.

Budget Your Take-Home Pay →

Plan your spending after salary sacrifice using the 50/30/20 rule.

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