How before-tax contributions work
Salary sacrifice directs part of future salary to super before income tax is calculated. Eligible personal contributions can also become concessional when you claim a tax deduction. In either case, the fund generally deducts 15% contributions tax, and higher-income rules can add tax for some people.
The benefit depends on your marginal tax position, the contribution amount and the fact that the money is preserved. A lower headline tax rate does not make a contribution affordable or suitable if it leaves the household short of cash.
Stay within the shared concessional cap
The general concessional cap for 2026–27 is $32,500 across all funds. Employer super, salary sacrifice and deductible personal contributions share it. Check myGov and fund transactions, then allow for employer contributions that will arrive before year end.
Eligible people with a total super balance below the relevant threshold may use unused concessional cap amounts carried forward from up to five earlier years. MyGov can show available amounts, but confirm the calculation before relying on it for a large contribution.
Get the agreement and notice right
A salary-sacrifice arrangement should be agreed with the employer before the salary is earned. Confirm whether the employer will contribute above the legal minimum, how bonuses are treated and when changes take effect. Sacrificed amounts do not replace compulsory super.
For deductible personal contributions, submit a valid notice of intent and receive the fund’s acknowledgement before claiming the deduction. Do not start a rollover or pension without checking how it affects the notice. Keep all documents with the relevant tax return.
Quick reference
Key things to remember
- Employer compulsory payments use part of the same concessional cap.
- Salary sacrifice should be agreed prospectively with your employer.
- Personal deductions require a valid notice of intent and fund acknowledgement.
- Higher-income earners may pay additional Division 293 tax.
Put it into practice
Your next steps
- 01
Estimate employer contributions for the full year.
- 02
Check unused carry-forward amounts in myGov if relevant.
- 03
Choose a regular amount that preserves take-home cash flow.
- 04
Review after bonuses, pay rises or job changes.
Check the source
Official information
Super and tax rules change. These primary sources are the right place to verify the details before you act.