How to maximise your take-home pay with max salary sacrifice super in 2026-27

How max salary sacrifice super affects your take-home pay

When you look at a job offer, the headline salary is rarely what lands in your bank account. After income tax and the Medicare levy, your take-home pay can be significantly lower. One way to keep more of your money working for you is to use max salary sacrifice super – a strategy that reduces your taxable income while boosting your retirement savings.

What is salary sacrifice super?

A salary sacrifice arrangement lets you exchange part of your salary for super contributions. As the Australian Taxation Office explains, these contributions are treated as employer super contributions, not personal ones. They reduce your assessable income for tax purposes, meaning you pay less PAYG withholding tax. The sacrificed amount is taxed inside your super fund at 15%, which is often lower than your marginal rate.

Importantly, your employer must still pay the full super guarantee (12% from 1 July 2026) on your original salary, as if no sacrifice existed. So salary sacrifice is an extra contribution on top of the mandatory 12%.

The caps you need to know

The ATO sets a limit on how much can be contributed to super at the concessional 15% tax rate. For 2026-27, the general concessional contributions cap is $32,500. This includes:

• Your employer's super guarantee contributions
• Any salary sacrifice contributions
• Personal contributions you claim as a tax deduction

If your total concessional contributions exceed $32,500, the excess is added to your taxable income and taxed at your marginal rate, plus an interest charge. So it's important to stay within the cap.

There's also the Division 293 threshold of $250,000. If your combined income and concessional super contributions exceed this, you pay an additional 15% tax on the excess contributions (or on the contributions, whichever is lower). High earners need to factor this in.

How salary sacrifice boosts your take-home pay

Let's walk through an example. Suppose you earn $100,000 in 2026-27. Without salary sacrifice, your tax (excluding Medicare) is calculated using the 2026-27 rates:

• 0–$18,200: nil
• $18,201–$45,000: 15c per $1 over $18,200 = $4,020
• $45,001–$100,000: 30c per $1 over $45,000 = $16,500
• Total tax = $20,520
• Medicare levy (2%) = $2,000
• Take-home = $100,000 – $22,520 = $77,480

Now, if you salary sacrifice $10,000 into super, your taxable income drops to $90,000. Tax becomes:

• $4,020 + 30c per $1 over $45,000 ($45,000 to $90,000 = $45,000 × 0.30 = $13,500) = $17,520
• Medicare levy = $1,800
• Take-home = $90,000 – $19,320 = $70,680

You also have $10,000 in super taxed at 15% ($1,500), so net super contribution after tax is $8,500. Your total wealth (take-home plus net super) is $70,680 + $8,500 = $79,180, compared to $77,480 without sacrifice. That's an extra $1,700 in your pocket (or super account).

If you max out the cap at $32,500 (assuming your super guarantee is already $12,000, leaving $20,500 room), the savings are even larger. But be careful not to exceed the cap.

Medicare levy and thresholds

The Medicare levy is 2% of your taxable income, but there are lower thresholds for low-income earners. The latest published single-person thresholds are $28,011 and $35,013. If your taxable income is below $28,011, you pay no Medicare levy. Between $28,011 and $35,013, you pay a shading rate of 10c per $1 over the lower threshold. Full-time salaries typically exceed $35,013, so you'll pay the full 2%.

Putting it all together

To work out your take-home pay after tax and Medicare, start with your gross salary, subtract any salary sacrifice amount, then apply the tax rates and Medicare levy. Use the Tax and Medicare guide for the exact rates. Remember that salary sacrifice reduces your taxable income but also reduces your take-home cash – the trade-off is that the sacrificed money goes into super where it grows tax-efficiently.

For most employees, the optimal strategy is to salary sacrifice up to the concessional cap, but only if you can afford the reduced cash flow. The Super page has more details on caps and strategies.

Important notes

• This is an estimate, not a tax assessment. Your actual tax may vary due to offsets like the Low Income Tax Offset (LITO) or HELP/HECS repayments.
• The maximum contribution base for super guarantee is $270,830 for 2026-27. If your earnings exceed this, your employer can stop paying super on the excess.
• Salary sacrifice arrangements must be agreed with your employer in writing. Check your employment contract or enterprise agreement.

By understanding how max salary sacrifice super works, you can make informed decisions that increase your long-term wealth without sacrificing your lifestyle today.