How It Works
Salary sacrifice means your employer redirects part of your pre-tax salary into super, a novated car lease, or other approved benefits. Because the money is redirected before income tax is calculated, you pay less tax on it.
Salary Sacrifice into Super
The most common arrangement. Your sacrificed amount goes into your super fund and is taxed at 15% (the super contributions tax rate) instead of your marginal tax rate. If you're in the 30% bracket, you save 15 cents on every dollar sacrificed.
| Marginal Rate | Tax on $1 of salary | Tax on $1 into super | Saving per $1 |
|---|---|---|---|
| 16% | 16c | 15c | 1c |
| 30% | 30c | 15c | 15c |
| 37% | 37c | 15c | 22c |
| 45% | 45c | 15c | 30c |
The Cap
Total concessional (before-tax) super contributions — including your employer's 12% and any salary sacrifice — are capped at $30,000 per year (2025–26). Contributions above the cap are taxed at your marginal rate plus an interest charge.
Catch-Up Contributions
If you didn't use your full $30,000 cap in previous years (from 2018–19 onwards) and your super balance is under $500,000, you can carry forward the unused amounts. This lets you make larger salary sacrifice contributions in a single year — useful for bonuses or one-off windfalls.
Frequently Asked Questions
Does salary sacrifice reduce my take-home pay?
Yes — but by less than you'd expect. If you sacrifice $10,000 from a $100,000 salary, your take-home drops by about $7,000 (not $10,000) because you would have paid $3,000 in tax on that money anyway.
Can I access the money in super early?
Generally no. Super is preserved until you reach preservation age (60 for most people). There are very limited hardship provisions, but salary sacrifice into super should be viewed as a long-term decision.
Does it affect my HELP repayments?
Be careful here. Salary sacrifice into super reduces your taxable income but your HELP repayment income includes reportable super contributions. So it won't help reduce your HELP repayments.