Salary sacrificing into super means asking your employer to pay some of your before-tax salary straight into your super fund. Those are concessional contributions, and inside super they're taxed at a flat 15%, instead of the marginal rate you'd pay if you took the money as salary. The whole benefit comes from that gap.
How much it saves
If your marginal rate, including the 2% Medicare levy, is 32%, every dollar you sacrifice is taxed at 15% instead, so you save 17 cents in the dollar. On a $120,000 salary sacrificing $10,000, that's roughly $1,700 less tax this year, with about $8,500 landing in super, the $10,000 less the 15% contributions tax. The higher your marginal rate, the bigger the gap.
You're converting a 30–47% tax hit into 15%, and the higher your rate, the bigger the gap.
Watch the concessional cap
There's a limit: the concessional contributions cap is $32,500 for 2026-27, up from $30,000. Crucially, that cap includes your employer's Super Guarantee, which is 12% of your salary, not just what you sacrifice.
On a $120,000 salary, the compulsory Super Guarantee alone is $14,400, and it counts against your cap before you sacrifice a cent.
That leaves $18,100 of headroom on a $120,000 salary before you hit the $32,500 concessional cap.
Go over the cap and the excess is added back to your taxable income and taxed at your marginal rate, which wipes out the benefit, so check your headroom before you set an amount.
The catches to weigh up
- It's locked away. You generally can't touch super until your preservation age, age 60 for anyone retiring now. Great for retirement, no help for a goal next year.
- Division 293. If your income plus concessional contributions tops $250,000, an extra 15% tax applies to your concessional contributions, still concessional, but less so.
One upside worth knowing: if your total super balance is under $500,000, carry-forward lets you use unused concessional cap from the previous five years, which is handy after a low-contribution year.
Is it worth it?
For most people on the 30%+ marginal rate who don't need the money before retirement, the maths is compelling, since you're converting a 30–47% tax hit into 15%. The question is rarely "does it save tax?", it does, but "can I afford to lock this money away?" That's a personal call, not a tax one.
Enter your salary and a sacrifice amount for a 2026-27 estimate: tax saved, extra into super, and your cap headroom.
Related: how income tax works · income tax calculator. General information only, not financial advice. Super rules are complex, so check the ATO or a licensed adviser before changing your contributions.