Salary sacrificing means asking your employer to pay some of your pre-tax pay into super. It can lower the tax on that money, as long as you stay within the cap.

Reviewed 31/10/2026. General information only, not personal advice.

How it works

1. You agree with your employer to pay part of your pre-tax salary into super.
2. That amount isn't taxed at your marginal rate. Instead, the super fund pays 15% contributions tax on it.
3. If your marginal tax rate is higher than 15%, the difference stays in your super.

Your employer's super guarantee (12% of ordinary time earnings) is paid on top. Since 1 January 2020, employers can't reduce their super guarantee because you salary sacrifice.

The caps for 2026-27

• Concessional (before-tax) contributions cap: 2025-26: $30,000. 2026-27: $32,500
• Non-concessional (after-tax) contributions cap: 2025-26: $120,000. 2026-27: $130,000

Concessional contributions include your employer's super guarantee, salary sacrifice, and personal contributions you claim a tax deduction for. Figures are from the ATO.

Unused cap: carry-forward contributions

If your total super balance was under $500,000 on 30 June of the previous year, you may be able to use concessional cap amounts you didn't use in the previous five financial years. This can help if you've had time out of work or received a large one-off amount, such as a bonus or an inheritance.

Things to watch for

• Division 293 tax: if your income plus concessional contributions is over $250,000, an extra 15% tax may apply to some contributions.
• Cash flow: salary sacrifice reduces your take-home pay, and the money is locked in super until you meet a condition of release.
• Low incomes: if your marginal rate is low, the tax benefit may be small or nil. The low income super tax offset may refund some contributions tax for eligible people.
• Other entitlements: salary sacrifice can affect things that depend on your income, so check with your employer how they calculate it.

Salary sacrifice in the years before retirement

Adding more to super in your 50s and 60s, sometimes alongside a transition to retirement pension, is a common strategy. Whether it's worthwhile depends on your tax rate, how close you are to the caps, and how much you need to live on now.

See what it means for you

Your initial discussion is free, and any advice fees are explained before you decide to go ahead. Book an initial discussion or call 07 3733 1731. Meet face to face in Eight Mile Plains, or online anywhere in Australia.

Frequently asked questions

What is the concessional contributions cap for 2026-27?

The general concessional contributions cap is $32,500 from 1 July 2026, up from $30,000. Your employer's super guarantee contributions, salary sacrifice and personal contributions you claim a deduction for all count towards it.

What happens if I go over the cap?

Excess concessional contributions are included in your assessable income and taxed at your marginal rate, with a tax offset for the 15% already paid by the fund. You can choose to release some of the excess from your fund.

Is salary sacrifice better than a personal deductible contribution?

They have the same tax treatment in the fund and both count towards the concessional cap. Salary sacrifice happens through payroll throughout the year. A personal deductible contribution lets you contribute later and claim a deduction, as long as you lodge a valid notice of intent with your fund on time.

Related reading

• Superannuation Advice
• Super calculator
• Account-based pension vs TTR