Salary sacrifice into super — when it's worth it
Sacrificing salary into super swaps your marginal tax rate (up to 47%) for the flat 15% contributions tax inside super. For mid- and high-income earners, that's a 17–32 cent saving on every dollar — but it's locked in until preservation age.
The maths in one line
For every $1 of pre-tax salary you sacrifice: $0.85 lands in super (after 15% contributions tax). If you'd otherwise pay 32.5% income tax + 2% Medicare on that $1, you would have kept $0.655 in your pocket. So you trade 65.5 cents of take-home for 85 cents of super — a 30% boost on every sacrificed dollar.
The concessional cap
For FY 2025-26 the concessional cap is $30,000 — that includes your employer's 12% Super Guarantee plus anything you sacrifice. Going over the cap means the excess is taxed at your marginal rate (negating the benefit). Unused cap from the previous 5 years can be carried forward if your total super balance was under $500,000 on 30 June last year.
Division 293 — the high-earner catch
If your income plus concessional contributions exceeds $250,000, an extra 15% Division 293 tax applies to the contributions above the threshold. Net rate becomes 30% — still better than the 47% you'd pay at the top marginal rate, but much smaller benefit than for sub-$250k earners.
When you should not sacrifice
- You're under 30 with no emergency fund — locking money to age 60 is risky.
- You're saving for a house deposit — though the FHSSS lets you withdraw $50k of voluntary contributions.
- Your income is under $45k — the gap between 16% marginal and 15% contributions tax is barely worth it.