What Is Salary Sacrifice into Super?
Salary sacrificing into superannuation means redirecting part of your pre-tax salary directly into your super fund instead of receiving it as income. The key benefit: contributions are taxed at 15% inside the fund rather than your marginal tax rate (which could be 32.5%, 37%, or 45%).
How Much Can You Salary Sacrifice? The 2025–26 Concessional Cap
The total concessional (pre-tax) contributions cap for 2025–26 is $30,000. This includes:
- Your employer's Superannuation Guarantee (SG) contributions (12% of salary)
- Your salary sacrifice contributions
- Any personal deductible contributions you make
If your employer pays $12,000 SG (12% of $100,000), you can sacrifice up to $18,000 more before hitting the $30,000 cap.
Tax Savings by Income Level
| Annual Salary | Marginal Rate | Super Tax | Saving per $1,000 | Max Extra Saving* |
|---|---|---|---|---|
| $45,001–$135,000 | 32.5% | 15% | $175 | ~$3,150 (if room) |
| $135,001–$190,000 | 37% | 15% | $220 | ~$3,960 |
| $190,001+ | 45% | 15% | $300 | ~$5,400 |
*Before Div 293 tax for incomes over $250,000. Max extra saving assumes full use of remaining cap space after employer SG.
🦘 Calculate Your Super Savings
See exactly how much tax you save with salary sacrifice and your projected super balance at retirement.
Super Contributions Calculator →How to Set Up Salary Sacrifice
- Check with your employer — Not all employers offer salary sacrifice arrangements. Ask your HR or payroll team.
- Complete a salary sacrifice agreement — This must be done before the income is earned, not after. You cannot salary sacrifice income you've already received.
- Nominate your super fund — Contributions go to your chosen fund (or your employer's default fund).
- Review your payslip — Check that the sacrificed amount appears as a super contribution and your gross taxable income has reduced.
The Carry-Forward Rule: Use Unused Cap Space
If your super balance is under $500,000, you can carry forward unused concessional cap space from the previous 5 years. This means if you contributed less than $30,000 in prior years, you may be able to make a larger one-off contribution now.
This is particularly useful for people who took time off work, had lower incomes in previous years, or have recently received a bonus or windfall.
Division 293 — High Income Warning
If your income plus concessional contributions exceed $250,000, the ATO charges an additional 15% tax via a Division 293 assessment, bringing the effective tax rate on super contributions to 30%. While this is still lower than the 37% or 45% marginal rate, it reduces (but doesn't eliminate) the benefit.
⚠️ Division 293 Calculator
Check if Division 293 applies to you and calculate your additional super tax liability.
Division 293 Calculator →Is Salary Sacrifice Worth It?
For most Australians earning above $45,000, salary sacrifice into super is one of the most tax-effective strategies available. Consider these factors:
- Yes, do it if you have room under the cap and won't need the money before retirement
- Consider carefully if you have high-interest debt — paying off a credit card at 20% interest may give a better return than super tax savings
- Be cautious if you're close to the preservation age and may need liquidity soon
- Check your life stage — super is locked until you reach preservation age (60 for most people born after 30 June 1964)