James earns $100,000. He didn't get a raise. He didn't change jobs. He didn't hire an accountant. He made one 10-minute change to his payroll settings in October — and at tax time, his bill was $2,200 lower.
The strategy is called salary sacrifice into superannuation. It's been legal for decades. It's ATO-approved. And the vast majority of working Australians have never used it.
What Salary Sacrifice Actually Is — In Plain English
Salary sacrifice into super means redirecting part of your pre-tax pay directly into your superannuation fund. Instead of that money hitting your bank account — where it gets taxed at your marginal rate (up to 47%) — it goes into super and gets taxed at a flat 15%.
The gap between your marginal rate and 15% is your tax saving. The wider the gap, the bigger the win.
"People always say they can't afford to sacrifice salary. But you're not giving up $10k — you're giving up $6,500 in take-home because the other $3,500 was going to the ATO anyway. The question is: do you want the ATO to have it or your future self?"— u/melb_accountant, r/AusTax (2.1k upvotes)
James's exact numbers (Stage 3, in force since 1 July 2024): Earns $100,000. Marginal rate 32% (30% + 2% Medicare). Salary sacrifices $10,000.
- Tax at marginal rate on $10,000: $3,200
- Tax his super fund pays at 15%: $1,500
- Net saving from contribution tax difference: $1,700
- Additional saving from lower taxable income: ~$200
- Total annual saving: ~$1,900
Note: Earlier versions of this article showed ~$2,200 savings using the pre–Stage 3 brackets (19/32.5/37/45). Under the current Stage 3 brackets in force since 1 July 2024, the 30% rate at this income produces ~$1,900 — still the single biggest legal tax move at $100K.
Real Savings at Every Income Level
You don't need to earn $100k for this to work. Here's what the numbers look like across incomes:
| Annual Income | Marginal Rate | Salary Sacrifice | Annual Tax Saving |
|---|---|---|---|
| $65,000 | 32% | $5,000 | ~$850 |
| $80,000 | 32% | $10,000 | ~$1,700 |
| $100,000 | 32% | $10,000 | ~$1,900 |
| $135,000 | 32% | $15,000 | ~$2,550 |
| $160,000 | 39% | $20,000 | ~$4,800 |
Based on 2024–25 tax brackets including Medicare Levy. Source: AusTax Super Calculator
What Australians On Reddit Are Saying
The One Number You Need to Know: $30,000
The concessional contributions cap for 2024–25 and 2025–26 is $30,000 per year. This includes your employer's SGC (currently 12%), any salary sacrifice, and any personal deductible contributions.
How to calculate your space:
- Annual salary: e.g., $80,000
- Employer SGC: $80,000 × 12% = $9,600
- Remaining cap space: $30,000 − $9,600 = $20,400
- You can salary sacrifice up to $20,400 without exceeding the cap
The Carry-Forward Rule: A Hidden Bonus
If your total super balance was under $500,000 on 30 June 2024, you can carry forward unused concessional cap space from the past 5 years — meaning you could contribute more than $30,000 this year.
Example: Sarah is 38, super balance $180,000. She used only $12,000 of her $27,500 cap in 2022–23 (leaving $15,500 unused). She can now add that to this year's cap — potentially contributing up to $45,500 concessionally.
How to Set It Up — 4 Steps
- Check your cap space — Log into myGov ATO account. How much of your $30,000 cap is your employer already using?
- Decide your contribution — Use Velofy's Tax Advisor to model the exact saving at different levels
- Email HR or payroll — Ask to set up a salary sacrifice arrangement. Most employers process this in 1–2 pay cycles
- Lodge your tax return — Your super fund reports concessional contributions to the ATO automatically
Velofy's dedicated salary sacrifice calculator shows your exact tax saving (cents per $1 at your marginal rate), the concessional cap tracker, and the 30-year compound super impact. Or use the broader tax calculator for profession-matched deductions alongside it.
Open Salary Sacrifice Calculator → Free · No account needed · 100% private · ATO 2024–25 rulesCovers concessional contribution caps, the $30,000 limit, carry-forward rules, Division 293 tax, and how to calculate your exact tax saving at different income levels.
Shop on Amazon AU →Includes salary sacrifice modelling worksheets, super contribution logs, and annual tax-saving calculators — the physical complement to Velofy's digital tool.
Shop on Amazon AU →Frequently Asked Questions
How much tax do you save with salary sacrifice into super in Australia?
Salary sacrificed amounts are taxed at 15% inside super instead of your marginal rate (30%–47% under Stage 3, in force since 1 July 2024). On a $10,000 sacrifice at a 32% marginal rate (30% + Medicare), the annual tax saving is approximately $1,700–$1,900 including the reduction in overall income tax.
What is the salary sacrifice super cap for 2024–25?
The concessional contributions cap for 2024–25 is $30,000. This includes your employer's SGC (12.0% from 1 July 2025), any salary sacrifice, and personal deductible contributions.
Does salary sacrifice affect my take-home pay?
Yes, but less than the contribution amount. If you sacrifice $10,000, take-home pay falls by approximately $6,500–$6,750, because the remainder would have been paid as income tax anyway. The difference goes to your super instead of the ATO.
What happens if I exceed the concessional contributions cap?
Excess concessional contributions are included in your assessable income and taxed at your marginal rate, with a 15% offset to account for contributions tax already paid. The ATO will send you an excess contributions determination.