Salary Sacrifice into Super: A Take-Home Sketch
Salary sacrifice into superannuation is a way to boost your retirement savings while reducing your taxable income. Instead of receiving part of your salary as cash, you ask your employer to pay it directly into your super fund. The amount you sacrifice is taxed at just 15% inside the fund (plus the Medicare levy if applicable), rather than at your marginal tax rate. This can be a powerful strategy, especially for higher earners.
The National Full-Time Average as a Reference
The national full-time adult ordinary-time average is $2,083.70 per week, or about $108,352 per year, according to the ABS Average Weekly Earnings for May 2026. This is the figure we use as the line on this site. If you earn around this amount, you are squarely in the middle of the full-time workforce. The full-time median is lower at about $90,532, and the all-employees median is about $74,100 (ABS Employee Earnings, August 2025).
For a resident earning the average, understanding how salary sacrifice affects take-home pay is straightforward with the 2026–27 tax rates: 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 adds 2% (before any reductions).
How Much Can You Salary Sacrifice?
The ATO caps the amount you can salary sacrifice (plus any employer contributions) each year. This is called the concessional contributions cap. For the 2025–26 financial year the cap was $30,000, and it is indexed in $2,500 increments. The precise figure for the current year is set by the ATO; check their website for the latest. If you exceed the cap, the excess is taxed at your marginal rate plus an excess contributions charge, so it pays to stay within the limit.
A Take-Home Example for the Average Earner
Imagine you earn the national full-time average of $108,352. Without salary sacrifice, your taxable income is $108,352. Using the 2026–27 rates, your tax (excluding Medicare) would be:
- $0 on first $18,200
- 15% on $26,800 ($18,201 to $45,000) = $4,020
- 30% on $63,352 ($45,001 to $108,352) = $19,005.60
- Total tax = $23,025.60
- Medicare levy (2%) = $2,167.04
- Total tax and Medicare = $25,192.64
- Take-home pay = $108,352 - $25,192.64 = $83,159.36
Now suppose you salary sacrifice $30,000 into super (the cap). Your taxable income drops to $78,352. Tax calculation:
- $0 on first $18,200
- 15% on $26,800 = $4,020
- 30% on $33,352 ($45,001 to $78,352) = $10,005.60
- Total tax = $14,025.60
- Medicare levy (2%) = $1,567.04
- Total tax and Medicare = $15,592.64
- Take-home pay = $78,352 - $15,592.64 = $62,759.36
You have $30,000 in super (taxed at 15% inside the fund, so $25,500 after contributions tax). Your total after-tax position is $62,759.36 take-home plus $25,500 in super = $88,259.36, compared to $83,159.36 take-home without sacrifice. You are better off overall, but the super money is locked away until preservation age.
Important Considerations
- The cap includes your employer’s compulsory super guarantee (currently 11.5% of ordinary time earnings). If your employer contributes $12,460 (11.5% of $108,352), you can only salary sacrifice up to $17,540 before hitting the $30,000 cap.
- Salary sacrifice agreements must be in place before the income is earned. You cannot sacrifice after receiving the pay.
- Some employers offer salary sacrifice for other benefits (e.g., cars, laptops), but super is the most common for retirement savings.
- The figures above are illustrative. Your actual tax may differ due to offsets, deductions, or the low-income super tax offset.
Where Does Your Salary Sit?
If you earn the national average, you are above the full-time median ($90,532) and well above the national minimum wage ($52,255 from 1 July 2026). State averages vary: New South Wales is about $109,658, Victoria $106,137, Queensland $106,064, South Australia $102,450, Western Australia $115,825, Tasmania $96,008, Northern Territory $103,173, and the ACT $119,090. Place a salary on the line to see how your pay compares.
The Bottom Line
Salary sacrifice into super can reduce your tax bill and grow your retirement savings, but the amount you can sacrifice is limited by the ATO’s concessional contributions cap. For someone on the national full-time average, sacrificing up to the cap (around $30,000) can save thousands in tax each year. However, you lose access to that money until retirement. Always consider your personal circumstances and seek professional advice if needed. For more on how we calculate these figures, see How the figures are set.