Max salary sacrifice: How to boost your super and reduce tax in 2026–27

How salary sacrifice affects your take-home pay

Salary sacrifice – also called salary packaging – lets you swap some of your pre-tax salary for a benefit of similar value. The most common use is to boost your super, because super contributions are not treated as fringe benefits and are taxed at only 15% inside the fund. By reducing your taxable income, you also pay less income tax and Medicare levy.

But the amount that reaches your bank account depends on how much you sacrifice and your marginal tax rate. The Australian Taxation Office explains that an effective arrangement must be agreed before you do the work, and you cannot access the sacrificed salary later.

The maximum you can salary sacrifice into super

For 2026–27, the general concessional contributions cap is $32,500. This cap includes your employer’s compulsory super guarantee (12% of your ordinary time earnings) plus any salary-sacrificed amounts. If you earn $100,000, your employer pays $12,000 in super, leaving you room to salary sacrifice up to $20,500 extra. The ATO indexes the cap each year in line with average weekly ordinary time earnings.

Remember: your employer must still pay the full super guarantee on your pre-sacrifice salary. You cannot sacrifice your way below the minimum super guarantee.

Other salary sacrifice options

You can also salary sacrifice for cars, electronic devices, or even rent (if your employer provides housing). These benefits are usually fringe benefits, and your employer may have to pay FBT. To reduce the FBT, you can make employee contributions from your after-tax income. The ATO’s example shows that with a $65,000 salary and a car benefit, making a $7,000 employee contribution actually increases your net disposable income compared to not packaging at all.

From 1 April 2027, work-related items such as laptops and phones provided through salary sacrifice will no longer be exempt from FBT. Plan ahead if you use these benefits.

Calculating your after-tax income with salary sacrifice

To estimate your take-home pay, start with your annual salary, subtract the amount you salary sacrifice, then apply the 2026–27 tax rates and the 2% Medicare levy. For example:

• Salary: $100,000
• Salary sacrifice to super: $15,000
• Taxable income: $85,000
• Tax on $85,000: $4,020 + 30c per $1 over $45,000 = $4,020 + $12,000 = $16,020
• Less Low Income Tax Offset (if eligible): up to $700, but phases out above $45,000
• Medicare levy: 2% of $85,000 = $1,700
• Total tax and Medicare: $17,720
• After-tax income: $85,000 – $17,720 = $67,280
• Plus the $15,000 goes into your super fund (taxed at 15% inside the fund)

Your actual take-home pay will be lower if you also have HELP/HECS repayments or the Medicare levy surcharge. Use our Take-home pay guide for a more detailed estimate.

Key things to watch

• Concessional cap: Exceeding $32,500 triggers excess contributions tax. The ATO publishes the cap each year.
• Super guarantee: Your employer cannot reduce your super guarantee because you salary sacrifice. It must be calculated on your ordinary time earnings before sacrifice.
• Government benefits: Salary sacrifice lowers your adjusted taxable income, which may affect child support, family tax benefit, or the Medicare levy surcharge.
• FBT: If you salary sacrifice a car, the fringe benefit amount may appear on your income statement and could affect your Medicare levy surcharge threshold.

For a full breakdown of tax rates and offsets, see our Tax and Medicare page. If you are considering salary sacrifice, seek financial advice tailored to your situation.