ATO Salary Sacrifice Calculator (2024-25)

What is salary sacrifice?

Salary sacrifice (sometimes called salary packaging) is a formal arrangement where you agree, in writing, to forgo part of your pre-tax salary in exchange for an equivalent benefit — most commonly an extra contribution to your superannuation fund.

Because the sacrificed amount never hits your bank account, it's never part of your assessable income, so you don't pay your marginal tax rate on it. Instead, it goes into super and is taxed there at the concessional rate of 15%. For most working Australians, that's a meaningful tax saving every year.

How the tax saving actually works

Say you earn $100,000 and decide to sacrifice $10,000 into super for 2024-25.

• Your taxable income drops from $100,000 to $90,000.
• You save income tax and Medicare levy on the $10,000 you sacrificed — at a 30% marginal rate plus 2% Medicare, that's about $3,200.
• Your super fund receives the $10,000, but the ATO takes 15% as contributions tax — $1,500.
• Net benefit: $3,200 saved minus $1,500 contributions tax = $1,700 ahead for the year, with an extra $8,500 in your retirement account.

The higher your marginal tax rate, the bigger the gap between your marginal rate and the flat 15% super rate — and the bigger your annual saving.

The 2024-25 concessional contribution cap

From 1 July 2024, the concessional (pre-tax) contributions cap is $30,000 per year — up from $27,500. This cap covers everything that gets the 15% concessional tax treatment, including:

• Your employer's compulsory Super Guarantee (11.5% for 2024-25, rising to 12% from 1 July 2025).
• Any salary sacrifice you make.
• Personal contributions you claim as a tax deduction.

If your total goes over $30,000, the excess is added back to your taxable income and taxed at your marginal rate, with a 15% credit for what the fund already paid. Practically, that wipes out the benefit, so it pays to stay under the cap.

Carry-forward unused cap (catch-up contributions)

If your total super balance was under $500,000 on 30 June of the previous financial year, you can use any unused concessional cap from the previous five years. So if you've under-contributed in the past, you may be able to sacrifice well above $30,000 in a single year without breaching the rules. This is especially handy for people returning to work after a break, or in a high-earning year (sale of a business, big bonus, etc.).

Division 293 — the high-income surcharge

If your Division 293 income (roughly: taxable income + reportable fringe benefits + low-tax super contributions) is over $250,000, an extra 15% tax applies to your concessional contributions. The effective tax on your sacrifice becomes 30% instead of 15%.

Salary sacrifice can still be worthwhile in this band — your marginal income tax rate at that level is 45% plus 2% Medicare (47%), so 30% inside super is still 17 cents better per dollar. But the gap is narrower. Run your own numbers above to see it.

Examples by income level

Approximate annual tax savings from sacrificing $10,000 into super (2024-25 brackets, single, no HECS, Medicare levy at 2%):

Marginal rate shown is income tax + 2% Medicare. Figures rounded.

When salary sacrifice doesn't make sense

Salary sacrifice is genuinely good for most working Australians, but it isn't universal. Honest scenarios where it can be the wrong call:

• You earn under $45,000. Your marginal rate is only 16% — barely above the 15% super tax. The benefit is tiny, and your cash flow is probably more valuable.
• You'll need the money soon. Super is locked up until preservation age (60 for most). If you're saving for a house deposit, an emergency buffer, or a career change, that money is better in your name than locked away.
• You have high-interest debt. Paying down a credit card at 20%+ beats any tax saving — sort that out first.
• You're close to retirement and at risk of breaching the transfer balance cap. Talk to an adviser; super isn't unlimited.
• Your employer reduces your SG to the lower base. Since 2020 this isn't allowed, but if your contract or payslip says otherwise, the maths can flip.

Your employer must still pay SG on your full salary

Since 1 January 2020, employers have to calculate compulsory Super Guarantee on your full pre-sacrifice salary, not the reduced amount. If your payslip shows SG calculated only on the lower salary, that's a red flag — raise it with your employer or with the ATO.

Salary packaging for not-for-profit and hospital staff

If you work for a registered Public Benevolent Institution (charities, aid orgs), a health promotion charity, or a public/non-profit hospital, you have a separate set of rules under the Fringe Benefits Tax exemptions. You can salary package up to $15,900 (PBI/charity) or $9,010 (hospitals) of everyday expenses tax-free per FBT year, plus meal entertainment and venue hire on top.

This is on top of any super salary sacrifice. The maths is different to standard super sacrifice, so a dedicated calculator is the safer way to model it — we're building one.

Frequently asked questions

Official ATO references

• Individual income tax rates — ATO
• Concessional contributions cap — ATO
• Division 293 tax — ATO
• Salary sacrificing for employees — ATO
• HECS-HELP compulsory repayments — ATO

Related calculators

This calculator is for information only and is not personal financial advice. For decisions specific to your situation, speak with a registered tax agent or licensed financial adviser. We are not affiliated with the Australian Taxation Office.