Salary sacrificing into super is one of the simplest, most powerful tax strategies available to working Australians — and most people either don’t use it or don’t use it well. Here’s how it works and how to size it.
The basic idea
You arrange with your employer to divert some of your pre-tax salary straight into super. Instead of that money being taxed at your marginal rate (up to 47% including Medicare), it’s taxed at just 15% as it enters super. For a 37% marginal earner, that’s a 22-cent-in-the-dollar tax saving on every dollar sacrificed — money that stays invested for you instead of going to the ATO.
The concessional cap
Salary-sacrifice contributions are concessional contributions, and they share a cap with your employer’s super guarantee (SG) and any personal deductible contributions. For 2026-27 the concessional cap is $32,500. Your employer’s 12% SG counts towards it, so your sacrifice room is the cap minus what your employer already pays.
Watch these traps
- Going over the cap. Excess concessional contributions are taxed at your marginal rate (with an offset) and can create paperwork — know your room before you set the amount.
- Division 293. If your income plus concessional contributions exceeds $250,000, an extra 15% tax applies to some or all of your concessional contributions. Still concessionally taxed — just less generously.
- Cashflow. Sacrificed money is locked in super until you meet a condition of release (generally age 60 and retired). Don’t sacrifice money you’ll need before then.
Salary sacrifice vs personal deductible contributions
If your employer won’t set up salary sacrifice, you can often get the same tax outcome by making a personal contribution and claiming a tax deduction. Both count towards the same $32,500 concessional cap.
Want the exact number you should be sacrificing — without tripping the cap or Division 293? Model it in a complimentary Donmont review, or estimate it with our salary-sacrifice calculator.
Frequently asked questions
How much can I salary sacrifice into super?
Salary sacrifice counts towards the concessional cap, which is $32,500 for 2026-27. Your employer's super guarantee counts towards the same cap, so your available room is the cap minus what your employer already contributes.
How does salary sacrifice save tax?
Sacrificed salary is taxed at 15% entering super instead of your marginal rate (up to 47%). For most middle and higher earners that's a substantial saving on every dollar contributed.
What is Division 293 tax?
If your income plus concessional contributions exceeds $250,000, an extra 15% tax applies to some or all of your concessional contributions - so they're taxed at 30% rather than 15%.
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