Could salary sacrificing boost your super? Learn how it works, the potential tax benefits and what to consider before contributing extra in 2026.
Salary sacrificing can be a valuable way to grow your super, but whether it's worthwhile depends on your circumstances.
Put simply, salary sacrificing means arranging for your employer to direct part of your pre-tax salary into super.
Why consider salary sacrificing?
The main attraction is the combination of retirement saving and potential tax effectiveness.
Salary-sacrificed amounts count as concessional contributions. For the 2026–27 financial year, the general concessional contributions cap is $32,500, up from $30,000 in 2025–26. Employer contributions and personal contributions claimed as a tax deduction also count towards this cap.
Depending on your circumstances, unused concessional cap amounts from previous years may also be available to carry forward. The ATO states eligibility includes having had a total super balance below $500,000 at the previous 30 June, with unused amounts available for up to five years.
When can salary sacrificing make sense?
It may be worth considering if you:
have spare cash flow after meeting your everyday expenses
want to increase your retirement savings
are approaching retirement and want to strengthen your super position
want to explore more tax-effective ways to save for retirement
haven't been using your full concessional contribution allowance.
What should you watch?
Putting more into super means putting money away for the longer term. You also need to be mindful of contribution caps.
High-income earners need another consideration. If your income and concessional super contributions total more than $250,000, Division 293 tax may apply.
From 1 July 2026, there are also additional tax considerations for people with very large super balances. The ATO states that new measures apply to total super balances above $3 million.
So, is it worth it?
For some Australians, yes. For others, maintaining cash flow, paying down debt or investing outside super may take priority.
The important part is making salary sacrificing part of your overall financial strategy, rather than looking at the tax benefit in isolation.
General information only. Consider obtaining personal financial and tax advice before acting.
