Where the saving comes from
Money sacrificed into super is taxed at 15% inside the fund instead of your marginal rate plus Medicare. The saving per dollar is simply the gap: 17c at the 30% marginal rate, 24c at 37%, 32c at 45%. Below $45,000 income the gap shrinks to 2c and sacrificing rarely makes sense. The trade-off is liquidity — contributions are preserved until you meet a condition of release, typically age 60 and retired.
The three traps
First, the $32,500 concessional cap (2026-27) includes your employer's 12% super guarantee — on a $150,000 salary the SG alone uses $18,000 of it, leaving $14,500 of sacrifice room. Exceed the cap and the excess is taxed at your marginal rate anyway, erasing the point. Second, Division 293: once income plus concessional contributions pass $250,000, an extra 15% tax applies to contributions, halving the benefit. Third, the one people miss: sacrificing does not reduce your HECS repayment — reportable super contributions are added back to repayment income. This calculator warns on the first two automatically.
Worth knowing
If your total super balance was under $500,000 last 30 June, unused cap amounts from the previous five years can be carried forward — a powerful catch-up in a high-income or capital-gains year. And personal deductible contributions achieve the identical tax outcome to salary sacrifice, with more timing flexibility, if your employer's payroll makes sacrificing awkward.