When I got my first job here, I assumed super was something to think about in my forties. Then I looked at how much tax I was paying on every extra dollar I earned, and realised I’d been ignoring one of the simplest wins available.
What salary sacrifice actually is
Your employer already pays super on top of your salary. Salary sacrifice is an agreement with your employer to send some of your pre-tax pay into super as well. Because it never becomes taxable income, it skips your marginal tax rate and gets taxed at 15% inside the fund instead.
What $100 looks like
Here’s an example for someone in the 30% tax bracket, plus the 2% Medicare levy.
$68
$85
Same $100 of salary, but $17 more of it ends up working for you. Over a whole career, compounding makes that gap much bigger.
The catches
- It’s locked away. You generally can’t access super until you reach preservation age and retire. Only sacrifice money you won’t need soon.
- There’s a yearly cap. Salary sacrifice and your employer’s contributions both count towards the concessional contributions cap, which is $30,000 for 2025–26. Going over it means paying extra tax.
- Temporary visa holders, take note. If you leave Australia permanently on a temporary visa, you can claim your super, but it’s taxed at a much higher rate. Factor that in if you’re not sure you’ll stay.
- High earners pay more. If your income is above $250,000, contributions can be taxed at 30% instead of 15%.
How I set it up
I emailed payroll, asked for a salary sacrifice form, and picked a fixed amount per pay. It took about ten minutes. Write about your own experience here: how you chose the amount, and how it feels a year later.
This is general information based on my own experience, not financial advice. Rules and caps change, so check the ATO or Moneysmart, or speak to a licensed financial adviser before acting.