Salary Sacrifice Calculator Australia

How salary sacrifice to super works

Salary sacrifice is an agreement with your employer to redirect part of your before-tax salary into your superannuation fund instead of receiving it as take-home pay. Because the sacrificed amount never appears in your assessable income, it avoids your marginal income tax rate — which can be up to 47% including the Medicare levy — and instead attracts only the concessional 15% contributions tax inside your super fund.

This creates a genuine tax saving: the difference between your marginal rate and 15% stays working for you inside super, rather than going to the ATO as income tax.

Worked example — $90,000 salary, $10,000 sacrifice

Take-home pay drops by $6,800 — but of the $10,000 sacrificed, $8,500 lands in super after the 15% contributions tax. The net advantage is $1,700: that's the tax saving that would otherwise have been lost, now compounding inside your super fund instead.

The concessional contributions cap

All concessional (before-tax) contributions to your super count towards a single annual cap — $32,500 for 2026–27 (up from $30,000 in 2025–26). This cap includes three things combined:

• Your employer's compulsory Superannuation Guarantee (12% of your ordinary time earnings)
• Any salary sacrifice you elect to make
• Any personal contributions you claim as a tax deduction

If your combined concessional contributions exceed the cap, the excess is taxed at your marginal rate instead of the concessional 15% rate — removing the tax advantage entirely for that portion, and potentially creating an unexpected tax bill.

Carry-forward unused cap

If your total super balance was below $500,000 at 30 June of the previous financial year, you may be able to carry forward unused concessional cap amounts from the previous 5 years. This is particularly useful if you had a lower-income year, took parental leave, or are catching up on super after a career break.

Division 293 tax — the high income surcharge

If your income plus low-tax concessional contributions exceed $250,000 in a financial year, an additional 15% tax applies to the contributions above that threshold — Division 293 tax. This brings the total tax on the affected portion to 30% instead of the standard 15%. The $250,000 threshold has not been indexed since 2017, meaning more Australians are drawn into it each year as wages grow.

Even with Division 293 applying, salary sacrifice is usually still worthwhile — 30% tax remains well below the top marginal rate of 47%. The benefit is simply reduced compared to lower income levels. Division 293 tax is assessed separately by the ATO after you lodge your tax return, not deducted at source.

Does salary sacrifice affect my HECS or HELP debt?

This is one of the most commonly misunderstood aspects of salary sacrifice. While sacrificing reduces your taxable income, it does not reduce your HECS/HELP compulsory repayment. The ATO's repayment income calculation specifically adds back your reportable super contributions — which includes salary sacrifice amounts above your compulsory Superannuation Guarantee — before calculating how much you owe.

In practice, this means salary sacrificing $10,000 will reduce your income tax bill but will not lower your HECS repayment obligation, because that $10,000 is added straight back in for the HECS calculation. This is different to how it affects standard income tax, where the sacrifice genuinely reduces your taxable income.

Salary sacrifice for things other than super

Some employers — particularly in the not-for-profit and public health sectors — allow salary sacrifice for benefits beyond super, subject to Fringe Benefits Tax (FBT) rules:

• Novated lease (car): uses either the statutory formula method or operating cost method to calculate FBT — a genuinely different calculation to super salary sacrifice, and not covered by this calculator.
• Laptops and electronic devices: often FBT-exempt if primarily used for work.
• Not-for-profit salary packaging: eligible NFP employees can salary package up to $15,900 of everyday living expenses (rent, mortgage, groceries) FBT-free each year, plus a separate $2,650 meal entertainment cap. Public hospital employees have a similar but distinct $9,010 cap.

These arrangements have their own separate rules, caps, and calculation methods — this calculator focuses specifically on super salary sacrifice, which is the most common and most straightforward form.

When salary sacrifice is worth it — and when it isn't

Salary sacrifice provides more benefit the higher your marginal tax rate is, because the gap between your marginal rate and the 15% contributions tax rate is what creates the saving:

• Below $18,200 taxable income: no benefit — you're not paying income tax to save in the first place.
• $18,201–$45,000 (15% bracket, 2026–27): minimal benefit — your marginal rate is close to the 15% contributions tax rate.
• $45,001–$135,000 (30% bracket): solid benefit — roughly 15 percentage points saved on every dollar sacrificed.
• $135,001–$190,000 (37% bracket): strong benefit — roughly 22 percentage points saved.
• Above $190,000 (45% bracket): the largest benefit — roughly 32 percentage points saved, until Division 293 reduces it above $250,000.

Salary sacrifice also locks the money away until you reach preservation age (currently 60 for most people) — a genuine trade-off against liquidity that's worth weighing against the tax saving, particularly if you may need access to cash before retirement.