Salary Sacrifice Calculator

How salary sacrifice works in Australia

Salary sacrifice (or salary packaging) is an arrangement between you and your employer where you agree to receive less pre-tax salary in exchange for a benefit. The most common form is additional superannuation contributions, where the sacrificed amount is taxed at 15% inside your super fund instead of your marginal tax rate - which could be as high as 45% plus Medicare levy.

For FY2025-26, the concessional contributions cap is $30,000 per year. This includes your employer's Superannuation Guarantee (SG) contributions of 11.5%, so the amount available for salary sacrifice depends on your base salary. If your total super income exceeds $250,000 (income plus concessional contributions), an additional 15% Division 293 tax applies to the contributions.

Novated leases and other benefits (laptops, phones, professional memberships) can also be salary sacrificed, but may attract Fringe Benefits Tax (FBT) at an effective rate of 47%. Some employers - particularly hospitals, charities, and not-for-profits - have FBT exemptions that make non-super salary sacrifice much more attractive for their employees.

How to use this salary sacrifice calculator

1. Enter your gross annual salary before any salary sacrifice deductions.
2. Enter the annual amount you plan to salary sacrifice and select the type of benefit (super, novated lease, or other).
3. The calculator applies FY2025-26 tax brackets, Medicare levy, and the 15% super contributions tax where applicable.
4. Compare your take-home pay, total tax paid, and effective tax rate with and without the salary sacrifice arrangement.

Salary sacrifice rules for Australian employees

The ATO requires that salary sacrifice arrangements be documented in writing before the income is earned - you cannot retrospectively sacrifice salary already owed. Employers must report salary sacrifice amounts correctly through Single Touch Payroll (STP Phase 2), which now distinguishes between gross salary, salary sacrifice super, and salary sacrifice other benefits. From an employer's perspective, salary sacrifice into super does not reduce the base for calculating Superannuation Guarantee - the SG must still be paid on the employee's ordinary time earnings before sacrifice. Getting these details right is essential for compliance and for ensuring employees receive the full benefit of the arrangement.

Why accurate payroll matters for salary sacrifice

Salary sacrifice arrangements need to be set up correctly in payroll to ensure the right amounts are withheld, reported to the ATO via STP, and contributed to the correct super fund on time. Errors in payroll processing - often caused by manual data entry - can result in incorrect tax withholding, missed SG deadlines, and Superannuation Guarantee Charge penalties. Automating your accounts payable workflow reduces the manual burden on finance teams, freeing them to focus on getting payroll compliance right.