How Much Super Can I Salary Sacrifice? Compare Job Offers by Take-Home Pay

How Salary Sacrifice Super Affects Your Take-Home Pay

When comparing job offers, the headline salary often includes superannuation as a separate contribution. But what really matters is the amount that lands in your bank account after tax and the Medicare levy. Salary sacrificing super can boost your retirement savings while reducing your taxable income, but it also reduces your immediate take-home pay. Understanding the limits and mechanics helps you make an informed choice.

The Concessional Contributions Cap

The Australian Taxation Office sets a cap on how much you can contribute to super at the concessional tax rate of 15%. For 2026–27, the general concessional contributions cap is $32,500 (). This cap includes:

• Your employer’s super guarantee (SG) contributions (12% of your ordinary time earnings from 1 July 2026)
• Any salary sacrifice amounts you agree with your employer
• Personal contributions you claim as a tax deduction

If you earn $80,000, your SG is $9,600 (12% of $80,000), leaving you up to $22,900 to salary sacrifice before hitting the cap. If you earn $200,000, your SG is $24,000 (capped at the maximum contribution base of $270,830, so SG is $32,500 – actually the SG on $200,000 is $24,000, leaving $8,500 room for salary sacrifice. Exceeding the cap means the excess is included in your assessable income and taxed at your marginal rate, though the excess concessional contributions charge no longer applies.

Division 293 Tax: An Extra Cost for High Earners

If your combined income and concessional super contributions exceed $250,000, you pay an additional 15% Division 293 tax on the excess or on your contributions, whichever is lower. For example, if your income is $240,000 and you salary sacrifice $20,000, your total for Division 293 purposes is $260,000. The $10,000 above the threshold attracts an extra 15% tax ($1,500). This reduces the benefit of salary sacrificing for high earners.

How Salary Sacrifice Changes Your Take-Home Pay

Salary sacrifice reduces your taxable income, so less PAYG tax is withheld. However, the sacrificed amount is taxed at 15% inside super, not at your marginal rate. The net benefit is the difference between your marginal rate (plus Medicare levy) and the 15% super tax.

Example:

• Annual salary: $100,000
• SG (12%): $12,000 (already included in your total remuneration package)
• Salary sacrifice: $10,000
• Taxable income after sacrifice: $90,000
• Tax on $90,000 (using 2026–27 rates): $4,020 + 30c per $1 over $45,000 = $4,020 + $13,500 = $17,520
• Medicare levy (2%): $1,800
• Less LITO (if applicable): maximum $700, but reduces above $37,500 – at $90,000, LITO is $325 – 1.5c per $1 over $45,000 = $325 – $675 = $0 (so no LITO)
• Total tax and Medicare: $19,320
• Take-home pay: $90,000 – $19,320 = $70,680

Without salary sacrifice, taxable income is $100,000:

• Tax: $4,020 + 30c per $1 over $45,000 = $4,020 + $16,500 = $20,520
• Medicare: $2,000
• Total: $22,520
• Take-home: $77,480

So salary sacrificing $10,000 reduces your take-home by $6,800, but adds $10,000 to super (taxed at 15% = $8,500 net). The net benefit is $1,700 ($8,500 in super vs $6,800 less take-home).

Comparing Job Offers: Look Beyond the Headline Salary

When evaluating two offers, consider:

1. Total remuneration package – some employers advertise a base salary plus super, others include super in the package.
2. Salary sacrifice flexibility – can you choose how much to sacrifice? Some employers cap it.
3. Your marginal tax rate – the higher your rate, the more benefit from salary sacrificing.
4. Division 293 exposure – if you earn over $250,000, the benefit is reduced.

Use our Take-home pay calculator to model different scenarios. Also check the Super guide for more on caps and rules.

Medicare Levy and Low-Income Thresholds

The Medicare levy is 2% of your taxable income, but if you earn below the single threshold of $28,011, you pay no levy. Between $28,011 and $35,013, the levy is phased in at 10c per dollar. Full-time workers on the national minimum wage ($26.44 per hour, $1,004.90 per week, annual $52,255) pay the full 2%.

Key Takeaways

• The concessional cap for 2026–27 is $32,500, including SG.
• Salary sacrifice reduces your take-home pay but boosts super.
• Division 293 tax applies above $250,000 combined income and contributions.
• Always compare offers on after-tax, after-super-sacrifice take-home pay.

For a detailed breakdown of your personal situation, refer to the ATO’s salary sacrificing page ().