The arbitrage in plain numbers
Money you salary sacrifice into super skips income tax and is taxed at a flat 15% inside the fund instead. On a $110,000 salary your marginal rate is 30% + 2% Medicare — so each sacrificed dollar costs you about 68c of take-home pay but delivers 85c into super. That's an instant, riskless ~25% uplift before any investment returns. In the 37% and 45% brackets the uplift approaches 40–55%.
The 2026-27 cap: $32,500 including your employer's 12%
The concessional cap rose to $32,500 this year, and it counts your employer's 12% Super Guarantee first. On $110,000, SG uses $13,200, leaving about $19,300 of sacrifice room. Exceed the cap and the excess is simply taxed at your marginal rate (it's added back to your income) — annoying, not catastrophic, but it erases the benefit.
Three catches worth knowing
Preservation. Sacrificed money is locked until you reach preservation age (60 for anyone born after mid-1964). Don't sacrifice money you'll need for a house deposit next year — unless you're using the First Home Super Saver Scheme, which lets first home buyers withdraw up to $50,000 of voluntary contributions.
HECS. Salary sacrifice reduces your taxable income but not your HECS repayment income — reportable super contributions are added back. The calculator above models this correctly: sacrificing won't cut your HECS bill.
Division 293. Once income plus concessional contributions exceeds $250,000, an extra 15% tax applies to contributions above the threshold — the effective rate becomes 30%, still below the 47% top marginal rate, so sacrifice usually remains worthwhile.
Sacrifice vs personal deductible contributions
The same tax outcome is available by contributing after-tax money and claiming a deduction (via a notice of intent to your fund). Salary sacrifice automates the discipline; personal contributions give flexibility to decide in June once you know your income. Both count toward the same cap.