Skip to main content

Use salary sacrifice to boost your super and save on tax^

Whether it’s $5 or $500, every bit counts – so consider adding what feels right for you.

To set up salary sacrifice, simply send your employer an email, or complete and hand them a salary sacrifice form.

More super

The extra money you put into super now, can make a big difference to your balance in the future.

Less tax

Salary sacrifice contributions are taxed at 15%, compared to the tax on your take-home pay, which can be up to 45%.^

^ Salary sacrifice will save tax in many but not all circumstances and will cause a reduction in your take home pay. Before contributing, consider the relevant superannuation thresholds including the current annual limit for all before-tax contributions and after-tax contributions. Exceeding any of these thresholds, may reduce any tax benefits you could receive. Visit aware.com.au/grow

What is salary sacrifice

Salary sacrifice are payments made on top of the compulsory superannuation contributions your employer pays to your super. If you salary sacrifice, your money goes directly into your super account instead of your pay, so you can reduce your income tax. It’s important to get good advice to make sure salary sacrifice is a good option for your own personal situation as this is general advice only.*

^ Salary sacrifice will save tax in many but not all circumstances and will cause a reduction in your take home pay. Before contributing, consider the relevant superannuation thresholds including the current annual limit for all before-tax contributions and after-tax contributions. Exceeding any of these thresholds, may reduce any tax benefits you could receive. Visit aware.com.au/grow

A little extra can make a big difference to your super

How you can boost your super with salary sacrifice.

Jacob is 42, earns $117,000 per year and has $145,000 in super.

He salary sacrifices $100 per until he’s 67 ($2,600 per year).

With his extra contributions, Jacob retires with $77,000 more super

Tax Savings

Jacob’s salary is taxed on the amount after salary sacrificing. So it’s reduced to $114,400.  

Jacob saves $442 in tax in the first year!

true
  • Retirement balances are rounded to the nearest $1,000.
  • Numbers are presented in today's dollars discounted by 3.5% (assumed AWOTE).
  • Based on average Aware male member age 42 and planning to retire at age 67.
  • Based on SG of 11.5% for 2024/25. This will increase to 12% on 1 July 2025 (where it will remain at 12%). Based on 2024/25 income tax rates.
  • Investment returns are based on the Aware Super MySuper Life Cycle option, assumed to be CPI + 4% until age 55, reducing from CPI + 4% to CPI + 2.75% between the ages 55-65 (inclusive) and CPI + 2.75% from age 65 onwards.
  • CPI is assumed to be 2.5% p.a.
  • Salary Sacrifice contributions increase in line with annual salary increases of 3.5% p.a. and assumes concessional contribution caps are indexed in line with AWOTE.
  • Investment returns are assumed to be net of tax.
  • Insurance premium is assumed to be the median for members with default insurance arrangements, indexed with AWOTE of 3.5% p.a.
  • This example is for illustrative purposes only and is not intended to provide a guarantee of outcome. It is a broad illustration of the steps a member could take, but the actions appropriate for an individual will vary depending on their personal circumstances. The case study is based on current regulatory requirements and laws, including tax rates, which may be subject to change. Investment return assumptions are for illustrative purposes only and for simplicity assume an average rate of return each year throughout the investment period. Actual returns year on year may vary materially and can be negative as well. If investment returns/inflation are higher/lower, final balances will differ.

Sam is 50, earns $91,000 per year and has $147,000 in super.

She salary sacrifices $150 per fortnight until she’s 67 ($3,900 per year).

With her extra contributions, Sam retires with $69,000 more super.

Tax Savings

Sam’s salary is taxed on the amount after salary sacrificing. So it’s reduced to $87,100. 

Sam saves $585 in tax in the first year!

true
  • Retirement balances are rounded to the nearest $1,000.
  • Numbers are presented in today's dollars discounted by 3.5% (assumed AWOTE).
  • Based on average Aware female member age 50 and planning to retire at age 67.
  • Based on SG of 11.5% for 2024/25. This will increase to 12% on 1 July 2025 (where it will remain at 12%).
  • Based on 2024/25 income tax rates.
  • Investment returns are based on the Aware Super MySuper Life Cycle option, assumed to be CPI + 4% until age 55, reducing from CPI + 4% to CPI + 2.75% between the ages 55-65 (inclusive) and CPI + 2.75% from age 65 onwards.
  • CPI is assumed to be 2.5% p.a. ·
  • Salary Sacrifice contributions increase in line with annual salary increase of 3.5% p.a. and assumes concessional contribution caps are indexed in line with AWOTE.
  • Investment returns are assumed to be net of tax.
  • Insurance premium is assumed to be the median for members with default insurance arrangements, indexed with AWOTE of 3.5% p.a.
  • This example is for illustrative purposes only and is not intended to provide a guarantee on outcome. It is a broad illustration of the steps a member could take, but the actions appropriate for an individual will vary depending on their personal circumstances. The case study is based on current regulatory requirements and laws, including tax rates, which may be subject to change. Investment return assumptions are for illustrative purposes only and for simplicity assume an average rate of return each year throughout the investment period. Actual returns year on year may vary materially and can be negative as well. If investment returns/inflation are higher/lower, final balances will differ.

It's easy to set up with your employer

To set up salary sacrifice with your employer, simply send them an email, or complete a paper form to hand to your employer.

Frequently asked questions

Salary sacrifice is an important part of planning your finances, so it's worth making sure it's right for you. If you're thinking about salary sacrificing into super, consider getting personal advice and checking with your employer.

Before adding to your super, you should consider:

  • What are your broader financial goals? 
  • How much do you realistically need today, and how much can you afford to put away? 
     

For instance, if you’re not going to access your super for several decades but you’re looking to buy a house soon, personal contributions may not necessarily be the right option for you.

Keep in mind, the earlier in life you start contributing to super, the more it will be worth in years to come.

There are limits on how much you can pay into your super fund each financial year without having to pay extra tax, called contribution caps. The cap on concessional contributions is $30,000 each year and includes both your salary sacrifice and the super contributions your employer pays you. If you go over this limit, you’ll pay extra tax.

If your combined income and concessional contributions exceed $250,000 an additional 15% tax (Division 293) will apply. Seeking professional advice is recommended.

Take advantage of unused concessional caps

If you haven't met the contribution cap of $30,000 this financial year, you can carry the unused amount to the next year. You can carry forward any unused amounts from up to five previous financial years, starting from the 2019/2020 financial year.

Find out more

Salary sacrificing can be very tax-effective, but the advantages depend on your own situation. For example:

Excess contributions

Be careful that you don't exceed the limits on superannuation contributions (see contributions limits above). This could happen unexpectedly if you receive a bonus or pay rise. If you go over the limit, you'll pay extra tax. Salary sacrifice contributions are taxed at 15%. If your combined income and concessional contributions exceed $250,000 an additional 15% tax (Division 293) will apply.

Eligible tax deductions

Also, you can't claim a tax deduction on salary sacrificed contributions to your super. That's because you didn't pay any income tax on them.

Reduced take home pay

Because some of your pay goes straight to your super, you’ll have less take-home pay. So you'll need to make sure you have enough money left over for your living expenses.

Most people can make salary sacrifice contributions until the age of 75. Once you turn 75, you can’t make salary sacrifice contributions.

It also depends on where you work. Most employers offer super salary sacrifice to their employees, but it’s best to check.

Even small amounts can make a difference. Contributing an extra $10 a week from age 45 could mean you’ll have $13,000 more in retirement.*

Keep in mind, the earlier in life you start contributing to super, the more it will be worth in years to come, because your money has more time to work for you. Earnings generated by superannuation benefits are usually taxed at lower rate than elsewhere.

* Retirement balances are rounded to the nearest $1,000 and are stated in today's dollars, deflated using Average Weekly Ordinary Time Earnings (AWOTE) at 3.5% p.a.
 

  • Investment returns are based on the Aware Super MySuper Life Cycle option, assumed to be CPI + 4% until age 55, reducing from CPI + 4% to CPI + 2.75% between the ages 55-65 (inclusive) and CPI + 2.75% from age 65 onwards.
  • CPI is assumed to be 2.5% p.a.
  • Member assumed retirement age is 67
  • Salary Sacrifice contributions and savings increased in line with annual salary increase of 3.5% p.a. and assumes concessional contribution caps are indexed in line with AWOTE.
  • Investment returns are assumed to be net of tax.
  • Insurance premium is assumed to be the median for members with default insurance arrangements, indexed with AWOTE of 3.5% p.a.
  • This example is for illustrative purposes only and is not intended to provide a guarantee on outcome. It is a broad illustration of the steps a member could take, but the actions appropriate for an individual will vary depending on their personal circumstances.
  • The case study is based on current regulatory requirements and laws, including tax rates, which may be subject to change. Investment return assumptions are for illustrative purposes only and for simplicity assume an average rate of return each year throughout the investment period. Actual returns year on year may vary materially and can be negative as well. If investment returns/inflation are higher/lower, final balances will differ.

It’s worrying when markets fall, even though market volatility, or ups and downs, are a normal part of investing. When markets drop you might see low, or even negative returns from your super in the short term. And it probably feels like the worst time to contribute more to your super.

The fact is though, that just the opposite could be true. When markets fall, it can actually be a good time to contribute more. That’s because investments cost less when markets are down, so you can buy more at a lower price, like buying at a discount. History tells us that over time markets recover and rise again, and as this happens you will benefit from growth in the value of your investments. It’s important to get good advice to make sure salary sacrifice is a good option for your own personal situation as this is general advice only.*

Get advice that suits you

* Salary sacrifice will save tax in many but not all circumstances and will cause a reduction in your take home pay. Before contributing, consider the relevant superannuation thresholds including the current annual limit for all before-tax contributions and after-tax contributions. Exceeding any of these thresholds, may reduce any tax benefits you could receive. For further information see aware.com.au/grow.

Project your super balance with My Retirement Planner

Log in to project your super contributions and see how salary sacrificing can make a difference to your super.

My Retirement Planner

Get advice

We have a range of advice options to suit your needs. Our team can answer questions about your account at no extra cost~, over the phone or virtually.

Speak to a financial planner

~Members can access advice about their Aware Super account at no extra cost, or advice on their broader needs for a fee.