Salary Sacrifice Calculator
Salary sacrifice calculator
What contributing more before tax costs now,
and builds by retirement
Salary sacrifice moves income from a marginal tax rate to the 15 per cent contributions rate. This tool shows what that shift is worth in the first year, and what it compounds to over a working life. Figures use 2026-27 rates and the $32,500 concessional cap.
The starting position
Rounded figures are fine. Everything recalculates as it is typed.
Employer contributions are $18,000, leaving $14,500 of room under the $32,500 cap. $12,500 of that is being used.
Return rates compared
Thin lines are employer contributions only, thick lines add the salary sacrifice. Dotted lines use the illustrative rate rather than the researched one.
This is a one-off difference at the point of contribution rather than an annual return, and it applies once to each dollar contributed. Money in super is preserved and generally cannot be accessed until preservation age is reached and a condition of release is met.
| Scenario | Return | Balance at retirement | Contributed after tax | Earnings |
|---|
How the figures are worked out. Income tax uses 2026-27 resident rates with the Medicare levy and the low income tax offset. Concessional contributions are taxed at 15 per cent inside the fund, with the Division 293 surcharge applied where income plus concessional contributions exceeds $250,000. Returns are applied to the opening balance each year and contributions are added at year end, so a contribution earns nothing in the year it is made. Salary rises at the rate set above and employer contributions rise with it. The concessional cap is indexed at the same rate in $2,500 steps, matching the way it moves with average weekly ordinary time earnings, and the sacrifice is reduced where it would otherwise push total concessional contributions past the indexed cap.
What the figures leave out. Amounts are nominal and ignore inflation, so a balance thirty years out buys less than the same figure today. Fund fees, insurance premiums, contributions tax offsets and the tax treatment of amounts above the cap are not modelled. Returns are applied as a flat rate each year with no negative years, which will always read more favourably than a real portfolio. Carry forward of unused cap is not modelled.
Contribution caps
One cap covers everything that goes in before tax
For 2026-27 the concessional contributions cap is $32,500. Concessional contributions are everything that enters super before tax: employer super guarantee, salary sacrifice, and personal contributions claimed as a deduction. All three count together against the same cap, and for anyone with more than one employer the cap still applies once across the lot.
Where total super balance was under $500,000 at 30 June of the previous year, unused cap from the previous five financial years may also be available. For 2026-27 that lifts the theoretical maximum to $175,000 in a single year. It is a genuinely useful provision for anyone whose income is uneven, which describes most business owners, but eligibility turns on individual circumstances and is worth confirming before contributing rather than after.
Where the advantage comes from
The gain happens once, at the point of contribution
A dollar taken as salary is taxed at a marginal rate. The same dollar sacrificed into super is taxed at 15 per cent on the way in, or 30 per cent on the relevant portion once income plus concessional contributions passes $250,000 and Division 293 applies. The difference between those two rates is the whole of the immediate advantage, and it is captured once on each dollar rather than earned again each year.
What compounds afterwards is the larger starting amount. That is why the gap in the chart widens over time even though the annual advantage does not change. It is also why the timing question matters more than most people expect: the same contribution made ten years earlier does considerably more work than the same contribution made ten years later.
Higher incomes
Division 293 narrows the gap but rarely closes it
Once income plus concessional contributions exceeds $250,000, an additional 15 per cent applies to the concessional contributions that sit above that threshold. The effective rate on those contributions becomes 30 per cent. That is a meaningful reduction in the advantage, and the calculator applies it automatically, but against a top marginal rate of 45 per cent plus the Medicare levy there is generally still a difference worth understanding.
For business owners the picture is usually more involved again, because the choice is not only between salary and super. Company tax rates, trust distributions, dividend timing and what the fund itself is invested in all bear on the answer, and a calculator cannot weigh those against each other.
Figures are a starting point, not an answer
What makes sense depends on age, balance, cash flow, business structure and what else is happening inside the fund. Many trustees find a short conversation is the quickest way to work out which parts apply to them.
General information only. The material on this page, and any output produced by the calculator, is general information only. It does not take into account any person's objectives, financial situation or needs, it is not a recommendation to make or vary a contribution, and it does not constitute personal advice. Figures are illustrative estimates, not a forecast or projection, and depend on assumptions that will not hold in practice. Past performance is not a reliable indicator of future performance. Superannuation, taxation and contribution rules change. Anyone considering acting on this information should consider its appropriateness to their own circumstances and obtain advice.
Accuracy. Rates and thresholds reflect the 2026-27 financial year and were current at the time of publication. Individual outcomes depend on matters the calculator cannot see, including other employment, multiple funds, existing contributions already made in the year, and eligibility for carry forward of unused cap. Contribution figures should be confirmed against ATO online services before acting.
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SMSF Financial Solutions Pty Ltd (ACN 627 878 175) is a Corporate Authorised Representative (CAR No. 001267673) of Finexia Wealth Pty Ltd (ACN 637 420 672, AFSL No. 522661). Level 5, 50 Cavill Avenue, Surfers Paradise QLD 4217.