Salary Sacrifice Guide
Learn how salary packaging works and calculate your potential tax savings
How Salary Sacrifice Works
Agree to Reduce Salary
You agree to receive part of your pay as a benefit instead of cash
Paid from Pre-Tax Income
The benefit is paid before income tax is calculated
Pay Less Tax
Your taxable income is lower, so you pay less income tax
Salary Sacrifice to Super: Tax Savings
When you salary sacrifice to super, you pay 15% contributions tax instead of your marginal rate.
| Salary | Sacrifice | Tax Saved |
|---|---|---|
| $80,000 | $10,000 | $1,500 |
| $100,000 | $15,000 | $3,300 |
| $150,000 | $20,000 | $4,400 |
| $200,000 | $25,000 | $7,500 |
Note: The $30,000 concessional contribution cap includes both employer super and salary sacrifice amounts.
What You Can Salary Sacrifice
Superannuation
Extra contributions on top of employer super. Most common form of salary sacrifice.
Novated Lease (Car)
Lease a car with pre-tax dollars. Running costs included in the package.
Electronics & Work Items
Laptops, phones, and work-related equipment with FBT exemptions.
Pros and Cons
Advantages
- Reduce your taxable income and pay less tax
- Build super faster with contributions taxed at 15%
- Access benefits like cars with pre-tax dollars
- May reduce HECS/HELP repayments by lowering taxable income
Disadvantages
- Less take-home pay available for immediate expenses
- Super is locked until retirement age
- May reduce employer super if based on post-sacrifice salary
- Novated leases have FBT implications if not structured correctly
Frequently Asked Questions
What is salary sacrifice?
Salary sacrifice (or salary packaging) is an arrangement where you agree to receive less pre-tax salary in exchange for benefits like extra super contributions, a car, or other items. The benefit is paid from your pre-tax income, potentially reducing your tax.
How much tax do I save with salary sacrifice?
The tax savings depend on your marginal tax rate. If you earn $100,000 (37% marginal rate) and salary sacrifice $10,000 to super (taxed at 15%), you save $2,200 in tax. Higher income = higher savings.
What can I salary sacrifice?
Common items include: additional superannuation contributions, novated leases (cars), laptops and electronic devices, professional memberships, and in some industries (healthcare, charity), items like rent and mortgage payments.
Does salary sacrifice affect my super guarantee?
Yes, but it depends on your employment contract. If your super is calculated on your pre-sacrifice salary, there's no impact. If it's calculated on your post-sacrifice salary, your employer super contributions will be slightly lower.
Can anyone salary sacrifice?
Most employees can salary sacrifice to super. However, other salary packaging options (cars, laptops) depend on your employer offering these arrangements. Not-for-profit and healthcare workers often have more options.
Related Guides
Calculate Your Take-Home Pay
See how salary sacrifice affects your net income with our calculator.
Open Salary CalculatorThis is general information only. Salary sacrifice arrangements have complex tax implications. Consult a financial adviser or tax professional before making changes.