Salary Sacrifice
to Super Calculator AU 2025-26

Salary sacrifice is an arrangement between you and your employer where you direct pre-tax salary into your superannuation fund instead of receiving it as cash wages. Contributions taxed at 15% inside super (concessional contributions) rather than your marginal income tax rate (16-45% + 2% Medicare). Authorized under section 6 of the SIS Act and ATO Ruling SGR 2009/2. The employer pays the contributions to your super fund. Limited by the concessional contribution cap: $30,000 for FY 2025-26 (rising from $27,500 in FY 2023-24, indexed to AWOTE). Catch-up: unused cap can be carried forward 5 years if your Total Super Balance is below $500,000 on 30 June of the prior FY (sections 291-25 of ITAA 1997).

For each $1 of salary sacrificed: you avoid your marginal tax + Medicare (combined 18% to 47%) and pay only 15% super contributions tax — saving 3 to 32 cents per dollar. Example: $90,000 earner in 30% bracket + 2% Medicare = 32% marginal. Sacrifice $10,000 → $3,200 saved on income tax, $1,500 paid as super tax = NET SAVING $1,700 per $10,000 sacrificed (17 cents per dollar). $200,000 earner at top marginal 45% + 2% = 47%. Sacrifice $10,000 → $4,700 income tax saved, $1,500 super tax = NET $3,200 per $10k (32 cents per dollar). High earners ($250k+ Div 293 income) lose 15 percentage points to Division 293 — effective net saving 17 cents per dollar (47% − 30% combined super tax).

$30,000 for FY 2025-26 (1 July 2025 - 30 June 2026), up from $27,500 in FY 2023-24 and FY 2024-25. The cap is indexed to Average Weekly Ordinary Time Earnings (AWOTE) in $2,500 increments — typically rising every 2-3 years. The cap is for COMBINED contributions: employer SG (11.5%/12%) + salary sacrifice + personal deductible contributions. If your total exceeds $30,000 in a financial year (and you don't have unused carry-forward room), the excess is treated as 'excess concessional contributions' and either refunded as income or taxed at your marginal rate (your choice via election form). Total Super Balance ≥ $500k blocks the catch-up provision but doesn't change the standard $30,000 annual cap.

Yes — since 1 July 2018 (TLA Bill 2017), if your Total Super Balance (TSB) was below $500,000 at 30 June of the prior financial year, you can use unused concessional cap from the previous 5 years. Example: if your FY 2024-25 contributions were $20,000 (cap $30,000), unused $10,000 carries forward. By FY 2027-28, you could potentially contribute $30k current cap + cumulative unused from FY 2022-23 through 2026-27 = could be $60,000+ in one year. Useful for: stay-at-home parents returning to work, mid-career professionals catching up after career break, business owners with variable income, anyone bunching concessional contributions in high-income years. Once TSB exceeds $500,000 at 30 June, the carry-forward benefit is lost for the following financial year.

No — your employer must still pay the 11.5% (FY 2025-26, rising to 12% from 1 July 2025) Super Guarantee on your ORIGINAL pre-sacrifice salary, not your reduced gross. This was protected by amendments to s.19 of the SGAA 1992 effective 1 January 2020 (closing a previous loophole where employers could base SG on the lower post-sacrifice gross). However, total contributions (SG + salary sacrifice + personal deductible) still count against the $30,000 concessional cap collectively. Some high-earner employers (with discretion or contractual base pay) may set base salary high — interaction with concessional cap requires planning.

Either works — same tax outcome ($30,000 cap, 15% super contribution tax, marginal rate deduction). Salary sacrifice advantages: simpler (no Notice of Intent form), employer manages it via payroll, contributions counted on T-slips automatically. Personal deductible advantages: full flexibility (decide each year based on income), can self-employed contribute (Sole trader/contractor), claim deduction directly on tax return without employer needing to set up arrangement. Both require the contributions to be reported on your annual MCS (Member Contribution Statement) and counted against your concessional cap. Personal deductible requires the Notice of Intent (s.290-170 ITAA 1997) submitted to your super fund within filing deadline. Either way, mid-year changes are easier with personal deductible.

Yes — salary sacrifice contributions count in 'low-tax contributions' for Division 293 calculation. Division 293 (extra 15% on concessional super for $250k+ earners) applies to the lesser of (a) concessional contributions within the $30,000 cap, or (b) excess of Division 293 income over $250,000. So heavy salary sacrifice that would push your Division 293 base higher is still tax-effective vs marginal rates — combined 30% (15% super tax + 15% Div 293) beats 47% top marginal. Even with Division 293, salary sacrifice typically saves 17 cents per dollar contributed. See our /au/tools/division-293-calculator for detailed modelling.

Indirectly via contribution splitting. Salary sacrifice goes into YOUR super account; you cannot direct it to your spouse's account. However, after the financial year ends, you can SPLIT up to 85% of your concessional contributions for the prior year to your spouse via Form NAT 71657 (Application for Splitting Concessional Contributions). The split must occur in the FY following the contribution year. Useful for: equalising super between spouses approaching pension phase (each gets their own $1.9M Transfer Balance Cap), accessing spouse's lower super tax bracket, qualifying for Government Co-contribution (low-income spouse). Alternative: spouse contributions tax offset (up to $540 if you contribute up to $3,000 to your spouse's super and they earn under $40k).

Mechanics-based answer (not advice): the earlier in your career, the more compound growth. Salary sacrifice of $5,000/year from age 30 to 65 at 7% compound return = $691,000 of additional super by 65 — vs $147,000 if started at 45. Higher-income years (post-promotion, post-bonus) save more tax per dollar sacrificed. Mid-career professionals often start with $200-500/month and increase. Closer to retirement, max out concessional cap to extract maximum tax benefit before access. Special triggers: career break ending (use carry-forward), inheritance or sale proceeds (use as bring-forward non-concessional), final pre-retirement years (push to cap). Always factor liquidity — super is locked until preservation age (60 for those born 1 July 1964+).

Excess concessional contributions are taxed under Division 291 of ITAA 1997. Two outcomes: (1) Default: the excess is added to your taxable income for the year and taxed at marginal rate; the 15% super contributions tax already paid is credited as a refund through your tax return. Net result: taxed at marginal rate, no benefit. (2) Election to keep in super: tick the option in your tax return — excess stays in super, taxed at marginal rate, plus you pay an additional 'excess concessional contributions charge' (~3% per year, mimics opportunity cost of using super early). Either way, excess concessional contributions count against your bring-forward non-concessional cap, reducing flexibility for future post-tax contributions. Always check year-to-date contributions before year-end to avoid breach.