How salary sacrifice to super affects your take-home pay when comparing job offers

Why your take-home pay matters more than the advertised salary

When you receive a job offer, the headline salary often includes superannuation or is quoted as "plus super." But what really matters is the amount that lands in your bank account after tax, the Medicare levy, and any salary sacrifice arrangements. Understanding how salary sacrifice to super changes your net pay helps you compare offers on an equal footing.

What is salary sacrifice to super?

Salary sacrifice to super is an agreement with your employer to divert part of your pre-tax salary into your super fund. The Australian Taxation Office explains that these contributions are treated as employer contributions and are taxed inside the super fund at 15%, which is generally lower than your marginal tax rate . Because the sacrificed amount is not included in your assessable income, you pay less income tax and Medicare levy.

Moneysmart notes that salary packaging (another name for salary sacrifice) can reduce your taxable income, but the benefits you receive may be subject to fringe benefits tax for your employer . For super contributions, however, no fringe benefits tax applies as long as the contributions go to a complying super fund.

How salary sacrifice to super changes your take-home pay

Let's walk through an example using the 2026–27 tax rates and Medicare levy. Suppose you earn $80,000 a year. Without salary sacrifice, your tax (excluding Medicare) is:

• $0 on the first $18,200
• 15c per $1 from $18,201 to $45,000 = $4,020
• 30c per $1 from $45,001 to $80,000 = $10,500 (since $35,000 at 30c)
• Total income tax = $14,520
• Medicare levy (2% of $80,000) = $1,600
• Total deductions = $16,120
• Take-home pay = $63,880 per year, or about $2,457 per fortnight.

Now, if you salary sacrifice $10,000 to super, your taxable income drops to $70,000. Recalculate:

• Tax on $70,000: $4,020 + 30c per $1 over $45,000 ($25,000 at 30c = $7,500) = $11,520
• Medicare levy (2% of $70,000) = $1,400
• Total deductions = $12,920
• Take-home pay = $57,080 per year, or about $2,195 per fortnight.

Your cash in hand drops by about $262 per fortnight. However, your super receives an extra $10,000 (taxed at 15% inside the fund, so $8,500 net after contributions tax). Over time, this can grow significantly. The trade-off is between immediate cash flow and long-term retirement savings.

The Medicare levy and thresholds

The Medicare levy is 2% of your taxable income, but it phases in for low-income earners. The latest published single-person thresholds are $28,011 and $35,013. If your taxable income is below $28,011, you pay no Medicare levy. Between $28,011 and $35,013, the levy is 10c per dollar over the lower threshold. Above $35,013, you pay the full 2%. Salary sacrifice to super can push your taxable income below these thresholds, reducing or eliminating the levy.

Contribution caps and limits

There is no limit on how much you can salary sacrifice to super, but there is a concessional contributions cap. For 2026–27, the cap is $32,500, which includes your employer's super guarantee (12% of your salary) and any salary sacrifice contributions . If you exceed the cap, the excess is taxed at your marginal rate plus an interest charge. Also, if your combined income and concessional contributions exceed $250,000, Division 293 tax may apply an additional 15% on contributions above that threshold.

How to compare job offers with salary sacrifice

When comparing two job offers, follow these steps:

1. Calculate base take-home pay for each offer using the 2026–27 tax rates and Medicare levy. Use our Take-home pay calculator for quick estimates.
2. Assess salary sacrifice options. If one employer offers salary sacrifice to super, decide how much you would sacrifice. Subtract that from gross salary and recalculate net pay.
3. Consider the super guarantee. Both employers must pay 12% super on your ordinary time earnings (up to $270,830). Salary sacrifice contributions are additional and do not reduce the employer's super guarantee obligation.
4. Factor in other benefits. Some employers offer salary packaging for cars, laptops, or childcare. These may reduce taxable income further but can incur fringe benefits tax for the employer, which may limit what is offered.
5. Look at the total package. The offer with lower take-home pay might still be better if it includes a generous salary sacrifice arrangement that boosts your super significantly. Use our Super guide to model long-term growth.

Example comparison

Offer A: $85,000 salary, no salary sacrifice. Offer B: $80,000 salary plus ability to salary sacrifice up to $15,000 to super.

• Offer A take-home (no sacrifice): Tax $16,770 + Medicare $1,700 = $18,470 deductions → net $66,530.
• Offer B if you sacrifice $10,000: Taxable $70,000 → tax $11,520 + Medicare $1,400 = $12,920 deductions → net $57,080 cash, plus $10,000 to super (net $8,500 after contributions tax).

Offer A gives you $9,450 more cash each year. But Offer B adds $8,500 to super (plus the 12% SG on $80,000 = $9,600, total super $18,100). Over time, the super growth may outweigh the cash difference. Your choice depends on your need for immediate cash versus retirement savings.

Key takeaways

• Salary sacrifice to super reduces your taxable income, lowering income tax and Medicare levy.
• Your take-home pay decreases because the sacrificed amount goes to super, not your bank account.
• Use the 2026–27 tax rates and Medicare thresholds to estimate net pay accurately.
• Always compare offers on total compensation, including super and salary sacrifice options.
• Check the concessional contributions cap ($32,500) to avoid extra tax.

For more details on tax rates and Medicare, see our Tax and Medicare page. To understand how salary packaging works beyond super, visit Salary packaging.