Salary sacrifice into super is one of the simplest and most effective tax-reduction strategies available to Australian employees. You agree with your employer to redirect a portion of your pre-tax salary into your super fund, where it's taxed at just 15% instead of your marginal rate. The result: you pay less tax and your super grows faster.
How salary sacrifice works
- You arrange with your employer (usually through payroll or HR) to redirect a set dollar amount or percentage of your salary into your super fund each pay
- The sacrificed amount is paid into super before income tax is calculated on your remaining salary
- Inside super, the contribution is taxed at 15% (contributions tax)
- Your taxable income is reduced by the sacrificed amount, lowering your income tax
Important: Salary sacrifice contributions are concessional contributions and count toward the $30,000 annual concessional cap (2025–26), along with your employer's SG contributions. Don't exceed the cap or you'll face additional tax.
Tax savings by income level
| Salary | Marginal rate (inc. Medicare) | Tax saved per $10,000 sacrificed | Available cap space (after 12% SG) |
|---|---|---|---|
| $60,000 | 32% | $1,700 | $22,800 |
| $90,000 | 32% | $1,700 | $19,200 |
| $120,000 | 39% | $2,400 | $15,600 |
| $180,000 | 39% | $2,400 | $8,400 |
| $220,000 | 47% | $3,200 | $3,600 |
Available cap space = $30,000 cap minus 12% SG on salary. Figures are simplified.
Step-by-step setup
- Calculate your cap space: $30,000 minus your expected SG for the year (12% × your OTE). If you have carry-forward unused cap space, factor that in too.
- Choose an amount: Start with what you can comfortably afford. Even $200/fortnight ($5,200/year) makes a meaningful difference.
- Notify your employer: Complete a salary sacrifice agreement through payroll. Most large employers have a standard form. There's no legal requirement for employers to offer salary sacrifice, but most do.
- Check your payslip: After the first pay, verify the sacrifice amount appears as a super contribution (not as regular pay).
- Monitor your contributions: Check your super fund's online portal to confirm contributions are being received correctly.
Example: $90,000 salary, $200/fortnight sacrificed
| Without sacrifice | With sacrifice | |
|---|---|---|
| Gross salary | $90,000 | $90,000 |
| Salary sacrifice | $0 | $5,200 |
| Taxable income | $90,000 | $84,800 |
| Income tax + Medicare | $21,517 | $19,817 |
| Take-home pay | $68,483 | $64,983 |
| Reduction in take-home | — | $3,500 |
| Extra going into super | — | $5,200 (minus $780 tax = $4,420 net) |
| Net benefit | — | $920/year more in super than the take-home cost |
The key insight: Sacrificing $5,200 only reduces your take-home by $3,500 — because you saved $1,700 in income tax. The other $920 is effectively "free" money going into your super. Over 20 years at 7% return, that $5,200/year grows to roughly $225,000.
Common mistakes to avoid
- Exceeding the concessional cap: Remember SG counts too. If you change jobs mid-year, you might get SG from two employers plus your sacrifice.
- Sacrificing from after-tax pay: True salary sacrifice must be arranged before the income is earned. You can't sacrifice money you've already been paid.
- Forgetting Division 293: If your income + concessional contributions exceed $250,000, an extra 15% tax applies on the amount over the threshold.
Related guides
Important information
The information on SuperFind is general in nature and does not take into account your personal financial situation, needs, or objectives. It is not personal financial advice. Before making any financial decisions about your superannuation, consider whether the information is appropriate for your circumstances and consider seeking advice from a licensed financial adviser. Super fund data including fees and performance returns shown on this site were current as of April 2026 — always verify figures on the fund's website. Past performance is not a reliable indicator of future performance. Data sourced from APRA, ATO, and individual fund disclosures. SuperFind is a DecisionLab publication.