How salary sacrifice into super works
Salary sacrifice is an arrangement where you agree to forgo part of your before-tax salary in exchange for your employer making additional contributions to your superannuation fund. These contributions are taxed at a concessional rate of 15% within the fund, rather than at your marginal tax rate. For the 2026-27 financial year, the concessional contributions cap is $30,000, as set by the ATO. This cap includes your employer's compulsory super guarantee (currently 11.5% of your ordinary time earnings) and any other before-tax contributions.
The effect on your taxable income
When you salary sacrifice, your taxable income is reduced by the amount sacrificed. For example, if you earn $120,000 per year and salary sacrifice $10,000, your taxable income becomes $110,000. This can lower the amount of tax you pay, especially if it moves you into a lower marginal tax bracket. The 2026-27 resident tax rates are: nil up to $18,200; 15% from $18,201 to $45,000; 30% from $45,001 to $135,000; 37% from $135,001 to $190,000; and 45% above $190,000. The Medicare levy of 2% applies to most taxpayers.
How this relates to the national full-time average
The national full-time adult ordinary-time average, as measured by the ABS Average Weekly Earnings for May 2026, is $2,083.70 per week, or about $108,352 per year. This figure is based on gross earnings before any salary sacrifice arrangements. Therefore, salary sacrifice does not change the average itself, but it can affect how your personal pay compares to that benchmark when considering net income.
If your gross salary is exactly $108,352 and you salary sacrifice $10,000, your taxable income drops to $98,352. You would still be shown on this site as earning the average gross salary, but your take-home pay after tax and super would be lower than someone on the same gross salary who does not salary sacrifice. Conversely, if your gross salary is above the average, salary sacrifice could bring your taxable income closer to or below the average line, which might be relevant for budgeting or comparing with others.
The cap and your strategy
The $30,000 cap is a total for all concessional contributions. If you exceed it, the excess is taxed at your marginal rate plus an interest charge. It is important to monitor your contributions, especially if you have multiple employers or change jobs. The ATO provides online tools to check your cap status.
For those earning below the average, salary sacrifice may still be beneficial if you can afford to reduce your take-home pay. However, the national minimum wage from 1 July 2026 is $26.44 per hour, or about $52,255 per year on a 38-hour week. At that level, salary sacrificing the full cap is not possible because the cap exceeds the gross salary. The full-time median salary is about $90,532 (ABS Employee Earnings, August 2025), so many workers on median pay could potentially sacrifice up to the cap, but should consider their living expenses.
State differences
The full-time average varies by state. For example, the Australian Capital Territory has the highest average at about $119,090, while Tasmania has the lowest at about $96,008. If you live in a state with a higher average, salary sacrifice might be more attractive because your marginal tax rate is likely higher. Conversely, in lower-average states, the benefit is smaller.
Other considerations
Salary sacrifice can also affect other entitlements, such as the super co-contribution or the low-income super tax offset, if your reduced income falls below thresholds. It does not affect the calculation of your compulsory super guarantee, which is based on your ordinary time earnings before sacrifice.
For a detailed comparison of your salary against the national average, use the Place a salary on the line tool. To understand how the figures are sourced, see How the figures are set. For more guides on salary and super, visit the Guides section.
Summary
The amount you can salary sacrifice into super is capped at $30,000 for 2026-27. This reduces your taxable income but does not change the gross salary used for the national full-time average. Your position relative to the average line on this site depends on your gross salary, not your salary sacrifice amount. Consider your personal financial situation and the cap before entering into an arrangement.