Salary sacrifice into super, explained
Salary sacrifice means asking your employer to pay part of your pre-tax salary into super instead of to you. It is taxed at 15% in your fund instead of at your marginal rate, so for most people more ends up in their pocket overall. Here is how it works, and the catches.
How it works
Say you earn $100,000 in 2026–27 and sacrifice $10,000 a year:
- Your taxable salary falls to $90,000, so your take-home pay drops by $6,800, not the full $10,000, because you pay less tax.
- Your fund receives $10,000 and takes 15% contributions tax, so $8,500 is added to your super.
- Overall you are $1,700 better off, as long as you don’t need the money before retirement.
Your employer still pays super guarantee of $12,000 on your full salary.
What it saves at different incomes
| Salary | Sacrificed | Take-home pay falls by | Super rises by | Better off by |
|---|---|---|---|---|
| $45,000 | $5,000 | $3,900 | $4,250 | $350 |
| $80,000 | $5,000 | $3,400 | $4,250 | $850 |
| $100,000 | $10,000 | $6,800 | $8,500 | $1,700 |
| $200,000 | $10,000 | $5,380 | $8,500 | $3,120 |
The higher your marginal rate, the bigger the saving. On low incomes there is little or nothing to gain. If your income is $37,000 or less, the government’s low income super tax offset refunds the 15% contributions tax into your super anyway, up to $500.
The limits
- The concessional cap. Salary sacrifice, your employer’s super guarantee and any personal deductible contributions together count towards a cap of $32,500 a year in 2026–27. On $100,000 with $10,000 sacrificed, there is $10,500 of room left. Amounts over the cap are taxed at your marginal rate, less a 15% offset.
- Carry-forward. If your total super balance was under $500,000 on 30 June last year, you can use unused cap amounts from up to 5 previous years.
- Division 293. If your income plus concessional contributions is over $250,000, an extra 15% tax applies to contributions above that level, so the saving is smaller.
Things to know before you start
- Set it up in writing with your employer before you earn the money. You can’t sacrifice pay or a bonus you have already earned.
- Sacrificed amounts are reportable super contributions. They are added back for HECS-HELP repayments, the Medicare levy surcharge, and some government payment income tests, so they don’t lower those.
- Check your take-home pay still covers your bills: the budget planner helps.
Sources: ATO, Salary sacrificing for employees; Concessional contributions cap; Division 293 tax.
Frequently asked questions
Does salary sacrifice reduce my employer’s super?
No. Since 1 January 2020, your employer must work out super guarantee on your salary before the sacrifice, and can’t count your sacrificed amounts towards it.
Can I get the money back if I need it?
Generally not until you retire after reaching your preservation age (60 for anyone born after 30 June 1964), apart from narrow cases such as the First Home Super Saver scheme or severe financial hardship. Only sacrifice money you won’t need before then.
Is salary sacrifice better than a personal deductible contribution?
The tax result is the same: both are concessional contributions taxed at 15% in the fund. Salary sacrifice is automatic from each pay; a personal contribution lets you choose the amount near the end of the year, but you must send your fund a notice of intent and get its acknowledgement before you claim the deduction.
General information based on ATO rules and rates, not tax advice. Figures are worked out by our calculators; see how we calculate.