How superannuation salary sacrifice changes your take-home pay in 2026–27

Understanding your take-home pay in 2026–27

When you look at a job advertisement, the salary figure is usually an annual amount before tax. What actually lands in your bank account each fortnight depends on three main factors: the income tax brackets, the Medicare levy, and any superannuation salary sacrifice arrangement you have with your employer.

This guide explains how each of these affects your fortnightly pay, using the 2026–27 tax rates published by the Australian Taxation Office and the latest Medicare levy thresholds.

Income tax brackets for 2026–27

The Australian Taxation Office has confirmed the tax rates for 2026–27. The tax-free threshold remains $18,200. After that, the rates are:

• $18,201–$45,000: 15 cents for each dollar over $18,200
• $45,001–$135,000: $4,020 plus 30 cents for each dollar over $45,000
• $135,001–$190,000: $31,020 plus 37 cents for each dollar over $135,000
• $190,001 and over: $51,370 plus 45 cents for each dollar over $190,000

These rates apply to your taxable income, which is your salary minus any deductions and before-tax salary sacrifice amounts. The tax is calculated progressively, so only the portion of your income in each bracket is taxed at that rate.

For example, if you earn $60,000, your tax (excluding Medicare levy) is $8,520, as shown in the income tax calculator example.

The Medicare levy

Most residents pay a Medicare levy of 2% of their taxable income. However, if your income is low, you may pay a reduced levy or none at all. The latest 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, the levy is phased in at 10 cents per dollar over the lower threshold. Above $35,013, you pay the full 2% on your entire taxable income.

For a full-time worker on the national minimum wage of $26.44 per hour, the annual salary is $52,255 (38 hours per week, 52 weeks). That is well above $35,013, so the full 2% Medicare levy applies. The levy adds 2 cents per dollar to your tax bill, reducing your take-home pay accordingly.

How superannuation salary sacrifice changes the calculation

Superannuation salary sacrifice is an arrangement where you ask your employer to pay part of your pre-tax salary into your super fund instead of paying it to you as cash. This reduces your taxable income, so you pay less income tax and Medicare levy. The sacrificed amount is taxed inside the super fund at 15%, which is usually lower than your marginal tax rate.

The Australian Taxation Office explains that salary sacrifice super contributions are treated as employer contributions and are additional to the super guarantee (which is 12% from 1 July 2026). Your employer must still pay the full super guarantee on your original salary, not the reduced salary after sacrifice.

There is no limit on how much you can salary sacrifice, but there are caps on concessional contributions (the total of employer super guarantee and salary sacrifice contributions) that are taxed at the 15% rate. For 2026–27, the concessional cap is $30,000 (indexed). If you exceed that, the excess is taxed at your marginal rate. Also, if your combined income and concessional contributions exceed $250,000, you may pay Division 293 tax (an additional 15% on contributions above that threshold).

Calculating your fortnightly take-home

To estimate your take-home pay, start with your annual salary. Subtract any salary sacrifice amount to get your taxable income. Calculate the tax using the brackets above, add the Medicare levy (2% of taxable income, unless you are below the threshold), and subtract that total from your taxable income. Then divide by 26 to get your fortnightly net pay.

For example, if you earn $82,118 (the average weekly total earnings for all employees according to the ABS), and you salary sacrifice $5,000 per year into super, your taxable income becomes $77,118. Your tax (excluding Medicare) would be:

• First $18,200: nil
• Next $26,800 (to $45,000): $4,020
• Remaining $32,118 (to $77,118): $9,635.40 (30 cents per dollar)
• Total tax: $13,655.40
• Medicare levy (2% of $77,118): $1,542.36
• Total tax and levy: $15,197.76
• After-tax income: $77,118 – $15,197.76 = $61,920.24
• Fortnightly take-home: $61,920.24 / 26 = $2,381.55

Without the salary sacrifice, your taxable income would be $82,118, tax $15,155.40, Medicare $1,642.36, total $16,797.76, after-tax $65,320.24, fortnightly $2,512.32. So salary sacrificing $5,000 reduces your fortnightly pay by about $130.77, but adds $5,000 to your super (taxed at 15% inside the fund, so net $4,250 after contributions tax).

Key points to remember

• The tax brackets and Medicare levy are applied to your taxable income after salary sacrifice.
• Salary sacrifice reduces your take-home pay by less than the amount sacrificed because you save tax at your marginal rate plus Medicare levy.
• The super guarantee is calculated on your original salary, not the reduced salary.
• You must stay within the concessional contributions cap to avoid extra tax.
• Use the Take-home pay calculator on this site to estimate your own figures.

For more details on salary sacrifice rules, see the Australian Taxation Office guide.