Salary Sacrifice Calculator

What is salary sacrifice?

Salary sacrifice (also called salary packaging) is an arrangement where you agree to forgo part of your pre-tax salary in exchange for contributions to your superannuation fund. The money goes into super before income tax is applied, which can significantly reduce your tax bill.

Instead of paying your marginal tax rate (up to 45%), the sacrificed amount is taxed at the concessional super rate of 15%. For high earners, this can mean savings of 20-30c on every dollar contributed.

FY2025-26 concessional contribution cap

The total amount you and your employer can contribute to super at the concessional rate is capped at $30,000 per year (FY2025-26). This includes:

• Employer Super Guarantee (12% of your salary)
• Any salary sacrifice contributions
• Personal deductible contributions

Contributions above the cap are taxed at your marginal rate plus an excess contributions charge. The calculator will warn you if your sacrifice would exceed the cap.

Division 293 tax (high income earners)

If your combined income and concessional super contributions exceed $250,000, you'll pay an additional 15% tax on concessional contributions (called Division 293). This brings the total tax on super contributions to 30% — still lower than the top marginal rate of 47% (including Medicare levy).

How to set up salary sacrifice

1. Check with your employer — most Australian employers offer salary sacrifice, but it's not mandatory.
2. Decide on an amount. Use this calculator to find the sweet spot between tax savings and keeping enough take-home pay.
3. Set up the arrangement in writing with your employer before the work is performed (you can't sacrifice salary you've already earned).
4. Your employer will reduce your taxable income and contribute the sacrificed amount directly to your super fund.

Is this right for you?

Salary sacrifice makes the most sense if you:

• Earn above $45,000 (where marginal rate exceeds 30%)
• Don't need the money for other short-term goals
• Haven't hit the concessional cap through employer contributions
• Are comfortable locking the money away until preservation age (60)

If you're saving for a house deposit or paying down high-interest debt, those goals may take priority. Super is a long-term wealth builder, not an emergency fund.