Why use this calculator
Salary sacrificing into superannuation is one of the most effective legal tax minimisation strategies available. By directing pre-tax income into super, you pay only 15% contributions tax instead of your marginal tax rate (which can be up to 45%). This calculator shows you exactly how much you save in tax and how much extra ends up in your super fund, helping you make informed decisions about how much to sacrifice.
How to use it
Enter your gross annual salary, the amount you want to salary sacrifice, your marginal tax rate, and the super contributions tax rate (usually 15%). The calculator shows your tax savings, the reduction in take-home pay, and how much extra goes into your super.
The formula
Income Tax Saved = Sacrifice Amount x Marginal Tax Rate. Super Tax Paid = Sacrifice Amount x 15%. Net Tax Saving = Income Tax Saved - Super Tax Paid. Extra in Super = Sacrifice Amount - Super Tax Paid.
Worked examples
$85,000 salary sacrificing $10,000 at 32.5% marginal rate
Save $1,750 in net tax, with $8,500 extra in super after 15% contributions tax
$120,000 salary sacrificing $15,000 at 37% marginal rate
Net tax saving of $3,300 per year with $12,750 added to super
When people use it
- Maximising retirement savings through pre-tax contributions
- Reducing taxable income to stay in a lower tax bracket
- Comparing the benefit of salary sacrifice at different income levels
- Planning contributions to stay within the concessional cap
Tips
- The concessional contributions cap is $30,000 per year (including employer contributions)
- Salary sacrifice is most beneficial at higher marginal tax rates
- Consider your cash flow needs before sacrificing too much take-home pay
- You can carry forward unused cap amounts from up to 5 previous financial years if your super balance is under $500,000
Questions people ask
- What is the contributions tax on salary sacrifice?
- Concessional (pre-tax) super contributions are taxed at 15% within your super fund. This is typically much lower than your marginal tax rate, which is where the tax saving comes from. High income earners (over $250,000) pay an additional 15% Division 293 tax.
- How much can I salary sacrifice?
- The concessional contributions cap is $30,000 per financial year (2024-25), which includes both employer contributions and salary sacrifice amounts. Exceeding this cap means the excess is taxed at your marginal rate plus an interest charge.
- Can I access salary sacrificed money before retirement?
- Generally no. Once money enters superannuation, it is preserved until you meet a condition of release (typically reaching preservation age and retiring). There are limited exceptions for severe financial hardship or compassionate grounds.