Salary Sacrifice Super

What is salary sacrifice?

Salary sacrifice means that you give up some of your take home pay and instead have your employer pay that amount directly into your Brighter Super account.

By putting money into your super this way, you can reduce your taxable income and accumulate more money for retirement.

Why salary sacrifice to super?

Salary sacrificed super contributions are known as concessional (before-tax) contributions, which are taxed at 15% rather than your marginal tax rate (which could be as high as 47% including the Medicare levy). This means money going into your super account from your before-tax pay attracts less tax than if it were paid to you as income.

By contributing to super from your before-tax pay, you effectively lower your taxable income while increasing the amount going into your super.

If your total annual income exceeds $250,000, Division 293 tax of an additional 15% applies to before-tax super contributions. This means you would pay 30% tax on salary sacrifice contributions, instead of the standard 15%.

Some people may prefer to make personal contributions to super from their after-tax pay, then claim the contribution as a tax reduction.

Learn more about making extra contributions

How much can I salary sacrifice to super?

There is a limit to the amount of concessional (before tax) contributions you and your employer can contribute to your super each year.

Everyone has a concessional contributions cap of $30,000 for the current financial year (2025/26), and if you exceed that cap you could pay higher tax.

Contributions made by your employer (e.g. superannuation guarantee) as well as contributions to which you have claimed a tax deduction also count towards this cap.

See our Contribution caps page for more information.

How does it work?

Tina has recently turned 45 and working full-time earning $75,000 per year and her employer is making SG contributions. She has a super balance of $200,000. Tina’s estimated balance at age 55 is $459,779.

Tina is considering salary sacrificing to boost her retirement balance. She can afford to contribute $100 per week ($5,200 per year) from her before-tax income.

Tina’s estimated balance at age 55 if she salary sacrifices will be $527,152, resulting in an additional $67,373.

This example is intended to be used for illustrative purposes only and is not intended to be relied on for the purpose of making a decision in relation to a financial product. You should seek personal advice from a financial adviser that takes into account your own circumstances before making any financial decisions. Source: Brighter Super calculations August 2025.

The following assumptions were made: The investment return is 6% p.a. after investment fees and taxes. Insurance premiums of $650 p.a., and administration fees and costs of $26 p.a. plus 0.14% p.a. have been taken into account. The SG rate is 12%. 15% contribution tax applies to SG and salary sacrifice contributions. Tina's salary, insurance premiums and the administration fee and cost of $26 p.a. is assumed to increase by 3.7% p.a.

In practice, investment returns are not guaranteed and may be negative at times. The results have not been adjusted to reflect the impact of future inflation. Figures have been rounded up to the nearest whole dollar.

Things to consider
Salary sacrifice can be a great way of growing your super, but it isn’t for everyone. Here’s a list of things to look out for:

Don’t leave yourself short of money. There’s no point putting extra into super if you’re not left with enough income to meet your commitments.

Salary sacrifice works best for middle to higher income earners. If you earn less than $37,000 you may not get any tax benefits.

Although salary sacrifice reduces your taxable income, your assessable income (used to calculate various tax rebates and Family Tax Benefit) may not change.

Salary sacrifice contributions do not qualify for the Australian Government’s super co-contribution of up to $500 each year.

A before-tax super contribution isn’t a fringe benefit and is not subject to fringe benefits tax. It will be reported on your PAYG payment summary as a reportable employer superannuation contribution and may impact your eligibility for government-provided benefits.

Important information if you work in local government

If you are a local government employee, you can salary sacrifice any standard member contributions you choose to pay. You can also salary sacrifice extra amounts to your super. Keep in mind, salary sacrifice contributions count towards your annual concessional contributions cap, along with any money your employer contributes and any contributions for which you claim a tax deduction.

Defined benefit members who salary sacrifice are required to increase their contribution to offset the contributions tax and are unable to cancel their employee contribution.
How do I get started?

Salary sacrifice is an arrangement between you and your employer so speak to your payroll area to find out how to get started.