How salary sacrifice into super works
Salary sacrifice is an arrangement with your employer to redirect part of your pre-tax salary straight into your superannuation fund, instead of receiving it as cash in your pay packet. The appeal is purely about tax: money you take as salary is taxed at your marginal rate — up to 47% with the Medicare levy — while money that goes into super as a concessional contribution is taxed at a flat 15%.
For most middle-income earners, that gap is the saving. If your marginal rate is 32% (including the Medicare levy) and you sacrifice $10,000, that money is taxed at 15% inside super rather than 32% in your hand — so an extra $1,700 ends up working for you instead of going to tax. The higher your marginal rate, the bigger the gap.
The concessional contributions cap
There's a limit on how much can go into super at the discounted 15% rate each year — the concessional contributions cap, which is $30,000 for 2025–26. Crucially, this cap includes the compulsory super your employer already pays (the 12% super guarantee), not just your sacrifice. The calculator adds both together and shows how much of the cap you're using. Going over the cap means the excess is taxed at your normal marginal rate, removing the benefit.
The catch: your money is locked away
Salary sacrifice isn't free money — it's a trade-off. Once it's in super, you generally can't touch it until you reach your preservation age and retire. So while the tax saving is real, you're giving up access to that cash now in exchange for a larger, tax-advantaged balance later. Whether that trade-off suits you depends on your age, your cash flow and your goals.
High earners and Division 293 tax
If your income plus your concessional contributions is over $250,000, an extra tax called Division 293 applies an additional 15% to your contributions — effectively taxing them at 30% rather than 15%. That still beats a 47% marginal rate, but it roughly halves the benefit. This calculator doesn't model Division 293, so treat its result as an upper estimate if you're a high earner.
Worked example: sacrificing $10,000
Priya earns $90,000 and is considering sacrificing $10,000 into super for 2025–26:
$10,000 salary sacrifice on a $90,000 salary
Priya's employer also pays $10,800 of super guarantee (12% of $90,000). Together with her $10,000 sacrifice, that's $20,800 of the $30,000 concessional cap — comfortably within the limit.