A step-by-step guide to salary sacrificing into super


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The COVID-19 Superannuation Early Release Scheme has now seen 3.3 million Australians withdraw funds from their super accounts - with an average amount of $7663.

Depending how far away you are from retirement age, this amount could make a significant dent in your nest egg.

The longer you've got to go until you stop work, the greater the damage due to the loss of compounding returns.

a step by step guide to salary sacrifing into super

If you did dip into your super, however, there is a way to do some damage control ... salary sacrificing. This means you'll contribute a percentage of your pre-tax salary into your super while you continue to receive the super guarantee employer contributions.

It's an effective way to boost your retirement savings, particularly if you're paying a higher rate of marginal tax (that's anyone earning more than $45,000 a year), because your extra salary contributions will be taxed at the super concessional rate of 15%. It's a win-win: you'll be building up your nest egg while reducing your tax.

Salary sacrificing does involve a reduction in your take-home pay, but the trick is to start small enough so it won't be missed, says Nexia Australia financial adviser Fran Hughes.

Start by contributing as little as the cost of a cup of coffee a day, or around $60 a fortnight, from your pay, which over the years, thanks to the positive power of compounding, will turn into a significant sum.

How to start salary sacrificing

  • Ask your pay office to put part of your pre-tax pay into your super account. It's best to do this by email so there is a record of your request.
  • You can increase or decrease the amount at any time by notifying your pay office.
  • The total amount of concessional super contributions can't exceed $25,000 a year. You can check how close you're getting to the maximum contribution limit by logging into your super account. "Search for the transaction summary commencing July 1 of the financial year, keeping in mind that the maximum amount for concessional contributions is $25,000 per financial year," says Hughes. "Exceeding your annual super contributions cap could potentially leave you with a tax bill, as excess contributions are taxed at the marginal tax rate."

If you're a sole trader, salary sacrificing won't apply to you but you may want to make personal contributions to super to save for your retirement. You may be eligible to receive the government's super co-contribution payment. To find out more information, visit ato.gov.au.


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Julia Newbould was editor-at-large and later managing editor of Money from November 2019 to February 2022. She was previously editor of Financial Planning and Super Review magazines; managing editor at InvestorInfo and at Morningstar Australia. Julia co-authored The Joy of Money, a book on women and personal finance. She holds a Bachelor of Economics from the University of Sydney where she serves on the alumni council.
Sunil Chakradeo
October 30, 2020 11.03am

Good Day,

Regarding the Salary Sacrifice limit of AUD 25000/-.

Is the Employer Contribution also included in the limit of AUD 25,000/- for Salary Sacrifice .



Vishal Singh
November 5, 2020 4.39pm

Hi Sunil,

25,000 isn't the salary sacrifice limit. It is the total limit of concessional contributions that will be charged at 15%. It includes the super guarantee ( what the employer has to contribute) and salary sacrifice.

Sonia Thornton
November 17, 2020 1.21pm

How do I find out how much super I have

Raymond Rhodes
April 20, 2023 12.19pm

Hi there ,

What is the minimum age that i can draw the Salary Sacrifice money from super ??