Salary sacrifice for super and your take-home pay
Salary sacrifice for super is a popular way to boost retirement savings while reducing your taxable income. Under this arrangement, you agree with your employer to forgo part of your pre-tax salary in exchange for additional employer super contributions. The sacrificed amount is treated as an employer contribution and taxed in the super fund at 15%, rather than at your marginal income tax rate. This can be a tax-effective strategy, especially if you are on a higher marginal rate.
How it affects your take-home pay
When you salary sacrifice, your gross salary is reduced by the sacrificed amount. Your take-home pay is calculated on the lower salary after tax and Medicare levy. For example, if you earn the national full-time average of $108,352 a year (ABS Average Weekly Earnings, May 2026) and sacrifice $10,000 to super, your taxable income becomes $98,352. Using the 2026–27 resident tax rates (nil to $18,200; 15% to $45,000; 30% to $135,000; 37% to $190,000; 45% above that, plus 2% Medicare levy), your tax and Medicare would be lower than on the full $108,352. Your take-home pay would be less, but your super fund receives an extra $10,000 (less 15% contributions tax).
Comparing with the national average
The site's line is the national full-time adult ordinary-time average of $108,352 a year. If your salary before sacrifice is at or near this average, sacrificing a portion will drop your take-home pay below the line. However, your total remuneration package (salary plus super contributions) may still be above average. The ABS also reports a full-time median of about $90,532 and an all-employees median of about $74,100 (ABS Employee earnings, August 2025). Salary sacrifice can be particularly beneficial for those earning above the median, as the tax savings are larger.
Tax considerations and caps
The ATO sets a concessional contributions cap each year. For 2026–27, the cap is $30,000. This includes your employer's super guarantee (currently 11.5% of ordinary earnings, rising to 12% from 1 July 2026) and any salary sacrifice amounts. If you exceed the cap, the excess is taxed at your marginal rate plus an interest charge. It's wise to monitor your total contributions to stay within the cap.
Take-home sketch: an example
Consider a resident earning $108,352 (the average) and sacrificing $15,000 to super. Their taxable income becomes $93,352. Tax on $93,352: nil on first $18,200; 15% on $26,800 ($4,020); 30% on $48,352 ($14,505.60); total tax $18,525.60. Medicare levy 2% on $93,352 = $1,867.04. Total tax and Medicare = $20,392.64. Take-home pay = $93,352 - $20,392.64 = $72,959.36 per year, or about $1,403 per week (based on 52 weeks). Without sacrifice, tax on $108,352: nil on $18,200; 15% on $26,800 ($4,020); 30% on $63,352 ($19,005.60); total tax $23,025.60; Medicare $2,167.04; total $25,192.64; take-home $83,159.36 per year, about $1,599 per week. So salary sacrifice reduces weekly take-home by about $196, but adds $15,000 to super (less 15% tax = $12,750 net contribution).
Other factors to consider
Salary sacrifice for super is not right for everyone. It reduces your cash flow, so you need to ensure you can meet living expenses. It also affects some means-tested benefits and may reduce your borrowing capacity. The super guarantee is based on your ordinary time earnings, which may be reduced by salary sacrifice (though the ATO has rules to prevent this in some cases). Always check with your employer and a financial adviser.
For more on how your salary compares, place a salary on the line or read our guides on salary packaging and super strategies.
State averages and your situation
If you live in a state with a higher average, such as the Australian Capital Territory ($119,090) or Western Australia ($115,825), salary sacrifice may still be beneficial, but your take-home pay relative to the state average will differ. See states and territories for full-time averages by region.
Summary
Salary sacrifice for super can be a tax-effective way to save for retirement, but it reduces your immediate take-home pay. Use the site's line to see where your pay sits against the national full-time average, and consider how much you can afford to sacrifice without straining your budget.