Salary Sacrifice Into Super: Is It Worth It?
Salary sacrifice is one of the most effective — and underused — tax strategies available to Australian workers. Yet most people don't do it, either because they don't understand it or they think they can't afford it. Here's the full picture.
How Salary Sacrifice Works
You ask your employer to redirect part of your pre-tax salary into your super fund. Instead of receiving that money as income (taxed at your marginal rate of 30-45%), it goes into super where it's taxed at just 15%. The difference is your saving.
If you're on $100,000 (30% marginal rate) and sacrifice $5,000: that $5,000 would have cost you $1,500 in income tax plus $100 in Medicare. Instead, it's taxed at 15% inside super = $750. You save $850 per year on just $5,000 of sacrifice.
The $30,000 Concessional Cap
Total concessional (pre-tax) contributions are capped at $30,000 per year for 2025–26. This includes your employer's 12% super guarantee contributions. On a $100,000 salary, your employer contributes $12,000, leaving room to salary sacrifice up to $18,000 before hitting the cap.
Carry-Forward Unused Cap
If your super balance is under $500,000, you can carry forward unused concessional cap amounts from the previous 5 financial years. This is powerful if you've had years where you didn't salary sacrifice — you may be able to contribute $50,000+ in a single year to catch up.
Is It Worth It?
The higher your marginal tax rate, the more you save. At 30% marginal rate, you save 15 cents per dollar sacrificed. At 37%, you save 22 cents. At 45%, you save 30 cents. The trade-off is that the money is locked in super until you reach preservation age (60 for most people).
If you're under 40, that locked money has 20+ years to compound at super fund returns — typically 7-9% per year. A $5,000/year sacrifice starting at 30 could add $400,000+ to your super by retirement.
See Your Salary Sacrifice Saving
Enter your salary and sacrifice amount to see the tax benefit instantly.
Open Salary Sacrifice Calculator →Check our Super Calculator to project your retirement balance with and without salary sacrifice, or the Retirement Calculator to see when you can retire.