Salary Sacrifice vs Extra Super Contributions: Which Is Better in 2026-27?
Both salary sacrifice and extra after-tax super contributions grow your retirement savings, but they are taxed very differently. Here is a practical comparison using 2026-27 caps and tax rates.
The core difference
| Feature | Salary sacrifice (concessional) | After-tax contributions (non-concessional) |
|---|---|---|
| How it works | Pre-tax income goes into super | After-tax income goes into super |
| Tax on contribution | 15% contributions tax | Nil (already taxed) |
| Annual cap (2026-27) | $32,500 (incl. employer SG) | $130,000 |
| Upfront tax saving | Yes — reduces taxable income | No |
| Best for | Reducing tax now | Extra savings once the concessional cap is used |
Tax saving by marginal rate
When you salary sacrifice, the money is taxed at 15% in your fund instead of at your marginal rate plus the 2% Medicare levy. Your saving is the difference:
| Taxable income | Marginal rate + Medicare | Contributions tax | Saving per $1,000 |
|---|---|---|---|
| $18,201 – $45,000 | 17% | 15% | $20 |
| $45,001 – $135,000 | 32% | 15% | $170 |
| $135,001 – $190,000 | 39% | 15% | $240 |
| Over $190,000 | 47% | 15% | $320 |
| Division 293 (income + concessional contributions over $250,000) | 47% | 30% | $170 |
Division 293 adds a further 15% on concessional contributions when your income plus concessional contributions exceed $250,000. Savings ignore the low income tax offset and the low-income Medicare levy reduction.
Example: $80,000 salary
Say you earn $80,000 and want to put an extra $10,000 into super in 2026-27. Compare the two routes:
| Item | Salary sacrifice $10,000 | After-tax $10,000 |
|---|---|---|
| Income tax and Medicare levy saved | $3,200 | $0 |
| Contributions tax paid | $1,500 (15%) | $0 |
| Net tax saving | $1,700 | $0 |
| Added to super | $8,500 | $10,000 |
Salary sacrifice reduces take-home pay by $6,800 rather than $10,000, a net saving of $1,700. The after-tax route adds more to super but costs the full $10,000 from your pocket.
When is after-tax super better?
- You have used the concessional cap ($32,500 including employer SG). After-tax contributions use the separate $130,000 non-concessional cap.
- You are in the 15% bracket. The saving is only $20 per $1,000, so keeping the cash accessible may matter more.
- Building a tax-free component: non-concessional contributions form part of the tax-free component of your super, which matters for some estate-planning situations.
The concessional carry-forward rule
If your total super balance was under $500,000 on 30 June of the previous financial year, you can use unused concessional cap amounts from up to five previous years to make a larger concessional contribution. Unused amounts expire after five years. Check your available amount in ATO online services through myGov.
Practical steps
- Work out your employer SG (salary × 12%) to see how much of the $32,500 cap is left. Read our superannuation rate guide for background.
- Use our salary sacrifice calculator to model the take-home impact.
- If your marginal rate is 30% or more and cap room remains, salary sacrifice first.
- If you have used the concessional cap, consider after-tax contributions or check carry-forward eligibility.
Frequently asked questions
Is salary sacrifice better than after-tax super contributions?
For most people, yes. Salary sacrificed (concessional) contributions are taxed at 15% in the fund instead of at your marginal rate plus the Medicare levy. After-tax (non-concessional) contributions give no upfront tax saving. Once your marginal rate plus Medicare levy is above 15%, salary sacrifice comes out ahead.
What is the concessional super contribution cap for 2026-27?
$32,500 a year. It includes your employer's super guarantee contributions (12% of ordinary time earnings), so on a $100,000 salary your employer already contributes $12,000, leaving $20,500 of room for salary sacrifice.
What is the non-concessional super contribution cap for 2026-27?
$130,000 a year. If you are under 75 and your total super balance allows it, the bring-forward rule lets you contribute up to three years of caps ($390,000) at once.
How much tax do I save from salary sacrifice?
Your marginal rate plus the 2% Medicare levy, minus the 15% contributions tax. In the 30% bracket that is $170 per $1,000 sacrificed.
See your salary sacrifice savings
Model the exact take-home impact of salary sacrifice at your income level.
Open Salary Sacrifice Calculator →