From 1 July 2026, the amount you can put into super before tax jumped to $32,500 a year — up $2,500 from last year's $30,000. For anyone salary sacrificing, that's $2,500 of fresh, tax-advantaged room that most people won't notice unless they go looking. If your arrangement still says “$30,000 cap”, it's out of date. This guide covers exactly how much headroom you have at your salary, what each sacrificed dollar saves you in tax, and a catch-up rule with a hard 30 June 2027 deadline that most Australians have never used.
What changed on 1 July 2026
Super has one before-tax contribution limit called the concessional contributions cap. It rose from $30,000 to $32,500 on 1 July 2026, because the cap is indexed to wage growth in $2,500 steps. That single cap covers everything that goes into super before tax:
- Compulsory employer Super Guarantee (SGC) — now 12% of your ordinary earnings (the final legislated rate)
- Salary sacrifice — extra before-tax pay you choose to divert into super
- Personal deductible contributions — money you pay in yourself and claim as a tax deduction
Add those together and they can't exceed $32,500 for the year. Go over, and the excess is added back to your taxable income and taxed at your marginal rate (with a 15% offset to avoid double-tax), plus a charge — so the goal is to fill the cap, not blow through it.
The Velofy Salary Sacrifice Calculator shows the tax you'd save at your income and sacrifice amount — including the Division 293 flag for high earners — and the Super Calculator projects what the extra contributions grow to by retirement.
Free · ATO 2026–27 · 100% in your browserHow salary sacrifice saves you tax
The mechanism is simple: money you salary sacrifice never hits your pay packet, so it's never taxed at your marginal rate. It's taxed at a flat 15% inside the fund instead. Your saving per dollar is the gap between the two:
| Your income band (2026–27) | Marginal rate | Saved per $1 sacrificed |
|---|---|---|
| $45,001 – $135,000 | 30% | 15c |
| $135,001 – $190,000 | 37% | 22c |
| $190,001 + | 45% | 30c |
Before Medicare Levy. For income above $190,000, Division 293 tax may lift the effective in-fund rate — see the watch-outs below. The saving is smallest at the very bottom of the scale: from 1 July 2026 the $18,201–$45,000 band drops to 15%, so a sacrifice made wholly within that band saves almost nothing on income tax (though compounding inside super still helps).
How much headroom do you actually have?
Here's where people trip up: the $32,500 cap already includes your employer's compulsory 12%. So your room to sacrifice extra is the cap minus what your employer is already putting in. As a rule of thumb at 12% SGC:
| Salary | Employer SGC (12%) | Room to sacrifice | ≈ per month |
|---|---|---|---|
| $60,000 | $7,200 | $25,300 | $2,108 |
| $80,000 | $9,600 | $22,900 | $1,908 |
| $100,000 | $12,000 | $20,500 | $1,708 |
| $120,000 | $14,400 | $18,100 | $1,508 |
| $150,000 | $18,000 | $14,500 | $1,208 |
Velofy illustration at 12% SGC. Your real figure depends on your exact ordinary time earnings and any existing arrangements. One trap for high earners: at a salary around $270,830 or above, employer SGC already fills the entire $32,500 cap — so sacrificing more would push you over. Always confirm your number first.
The catch-up play: carry-forward unused cap
This is the part most Australians have never used. If your total super balance was under $500,000 on 30 June of the prior year, you can carry forward unused concessional cap from the previous five years and use it all in one year. That's huge if you've had years of low contributions — a career break, self-employment, time overseas, or simply never getting around to salary sacrifice.
| Financial year | Cap that year | Still usable in 2026–27? |
|---|---|---|
| 2025–26 | $30,000 | Yes |
| 2024–25 | $30,000 | Yes |
| 2023–24 | $27,500 | Yes |
| 2022–23 | $27,500 | Yes |
| 2021–22 | $27,500 | Yes — last chance, expires 30 June 2027 |
| 2020–21 | $27,500 | No — expired 30 June 2026 |
You can model what a large one-off catch-up contribution grows to with the Super Calculator, and check the tax saved this year with the Salary Sacrifice Calculator.
Four watch-outs before you set it up
Salary sacrifice is one of the most reliable tax-optimisation moves available — but there are edges to respect:
- Division 293 (high earners). If your income plus concessional contributions tops $250,000, an extra 15% applies to those contributions — so the in-fund rate becomes 30%. That still beats the 45% marginal rate, but it narrows the gap. The $250,000 threshold isn't indexed.
- Going over the cap costs you. Contributions above $32,500 are added to your taxable income and taxed at your marginal rate (with a 15% offset) plus a charge. Leave a buffer if your income or hours are variable.
- It won't cut your HECS. Employer salary sacrifice is added back as a Reportable Employer Super Contribution when your HECS-HELP repayment is worked out — so it doesn't lower your compulsory repayment. If reducing HECS is the goal, a personal deductible contribution is the lever (see the HECS repayment calculator), but the rules are nuanced.
- Personal contributions need the paperwork. If you contribute personally and want to claim the deduction, you must lodge a valid Notice of Intent (s290-170) with your fund and get it acknowledged before you lodge your return. Miss it and the deduction is gone.
One more for the very top end: from 1 July 2026, the new Division 296 tax applies an extra 15% to earnings on super balances above $3 million. If you're near that level, get specialist advice before maximising contributions.