Payjoey.

Super sacrifice · 2026-27

What salary packaging into super really saves

The gap between your marginal rate and the 15% your fund pays is real money. Two things blunt it, and neither tends to come up when the arrangement is offered to you.

ATO super rules · verified

Caps and rates verified against the official sources — how we check.

Your employer’s guarantee already uses $14,400 of the $32,500 cap, so there is $18,100 of room.

Better off by, each year

$2,550

Cash plus super, against taking the same $15,000 as salary.

Reaches your fund $12,750Contributions tax $2,250

How it’s made up

Income tax and levy saved$4,800
Contributions tax in the fund, 15%−$2,250
Better off by$2,550

Your study loan

Taxable income, after sacrificing$105,000
Income the loan is assessed on$120,000
Compulsory repayment, change$0

Against the cap

Employer guarantee, 12%$14,400
Total concessional contributions$29,400

Your compulsory study loan repayment is $7,570.80 whether you sacrifice or not.

Sacrificing against not sacrificing

Money in super is preserved until you meet a condition of release, usually retirement. The benefit above is real but it is not spendable now. General information only — not financial or tax advice, and super decisions are worth taking properly.

Your study loan does not get cheaper. At all.

This is the claim worth checking before you sign anything. Salary sacrifice reduces your taxable income, and it is easy to assume every income-tested thing follows it down. Your compulsory study loan repayment does not, and the reason is precise rather than vague.

Repayment income is taxable income with reportable super contributions added back. Sacrificing subtracts an amount from one side of that sum and adds exactly the same amount to the other. The total cannot move. On the figures above, taxable income falls to $105,000 while the income your loan is assessed on stays at $120,000, and the repayment is $7,570.80 either way.

The income tax saving is genuine — $2,550 a year on these numbers. It is only the study loan part of the pitch that is not.

The cap is smaller than it looks

The concessional cap is $32,500, and it counts everything concessional, not just what you choose to sacrifice. Your employer’s 12% guarantee is concessional and is already inside it.

Room left under the cap

How much concessional cap room is left after the employer guarantee, by salary
SalaryEmployer guaranteeRoom left to sacrifice
$80,000$9,600$22,900
$120,000$14,400$18,100
$180,000$21,600$10,900
$240,000$28,800$3,700
$280,000$32,499.60Effectively none

Read the bottom row twice. The maximum contribution base is derived from the cap itself — the ATO calculates one from the other — so at the top of the scale the guarantee has consumed the entire cap and there is nothing left to sacrifice. Salary packaging into super is a middle-income tool, and the people most often sold it are sometimes the least able to use it.

Going over does not just fail to help. Excess concessional contributions are included in taxable income and taxed at the marginal rate, which removes the concession entirely for the amount over the cap.

Division 293, and the halved concession

Once income plus concessional contributions passes $250,000, an extra 15% is charged on those contributions. Division 293 tax is 15% of the excess over the threshold, OR of the taxable super contributions, whichever is less.

The effect is straightforward: the fund still pays 15% and Division 293 charges another 15%, so the effective rate on contributions becomes 30%. Against a top marginal rate the arrangement still works, but it works about half as well.

One thing this page gets right that is easy to get wrong: most of a high earner’s Division 293 bill is owed on the employer guarantee whatever they do. Only the extra amount your own sacrifice causes is charged against the decision here.

Three things that are true and reassuring

  • Your employer super is untouched. Salary sacrifice super contributions do not reduce the amount an employer calculates the super entitlement on, and do not count towards the super guarantee. The employer must still pay the full guarantee as though no arrangement existed.
  • No fringe benefits tax. Sacrificed super paid to a complying fund is not a fringe benefit and attracts no FBT.
  • No statutory ceiling on the arrangement itself. There is no legislated limit on how much can be sacrificed unless the terms of employment set one — the limits that bite are the concessional cap and Division 293.

And one that is not: the money is preserved. A tax saving you cannot reach for thirty years is still a tax saving, but it is not the same as cash, and any comparison that treats it as cash is flattering the arrangement.

How this compares with a novated lease

Both are sold as salary packaging and both reduce taxable income, but they behave in opposite ways for anyone with a study loan.

Salary sacrifice into super compared with a novated lease
Sacrifice into superNovated lease
Effect on taxable incomeFallsFalls
Effect on study loan repaymentNone at allRises
WhyAdded back at face valueAdded back grossed up
Limited byThe concessional capThe car and the lease terms
When you can use the moneyOn retirementImmediately — you drive it

If you have a study loan, super is the neutral option and the novated lease is the one that needs modelling before you commit. Neither is a bad idea; they are simply not the same idea.

Frequently asked questions

Does salary sacrificing reduce my HECS repayment?
No, for the reason set out above — so the useful question is what does. Only two levers move a study loan. A voluntary payment reduces the balance directly, and one that reaches the ATO before 1 June also escapes that year’s indexation, which is the single piece of timing worth acting on. Earning less genuinely lowers the compulsory repayment, but that is not advice anyone wants. What will not work, whatever it does to your tax: packaging into super, a novated lease, or negatively gearing a property. All three are added back. If clearing the loan sooner is the actual goal, the money is better sent to the ATO than to your fund, where you cannot reach it for decades anyway.
How much can I actually sacrifice?
Less than the cap, because your employer has already spent part of it. The cap counts everything concessional, and the 12% guarantee is concessional. On $120,000 the guarantee alone is $14,400, so of the $32,500 cap you have $18,100 of genuine room, not the full amount. Sacrifice past that and the excess is added back into your taxable income at your marginal rate, which is precisely where it started.
Will sacrificing reduce the super my employer pays me?
It must not. Salary sacrifice contributions do not reduce the amount your employer calculates the guarantee on, and they do not count towards it — the employer has to pay the full guarantee as though no arrangement existed. If your employer is calculating your super on the reduced salary, that is worth raising, because it is not how the rule works. Sacrificed amounts are classified as employer contributions and sit on top of the guarantee, not inside it.
Why do high earners get so little from this?
Two things stack. The maximum contribution base caps the guarantee at $32,499.60, which is almost exactly the $32,500 cap — the ATO derives one from the other — so on a large salary the guarantee has already consumed the entire cap and there is nothing left to sacrifice. And above $250,000 of income plus contributions, Division 293 charges a further 15%, taking the effective rate on contributions to 30%. Salary packaging into super is mostly a middle-income tool, whatever the brochure says.
Is packaging into super better than a novated lease?
They fail differently, which matters more than which is bigger. Super sacrifice leaves your study loan repayment exactly where it was. A novated lease creates a reportable fringe benefit that is reported at 1.8868 times its value and pushes your repayment income UP, so it can raise the repayment while cutting your tax. If you have a study loan, super is the neutral option and the lease is the one to model carefully.
What if I did not use my cap in previous years?
You may be able to carry it forward. Since 1 July 2018, anyone whose total super balance was under $500,000 on 30 June of the previous year can use unused cap amounts from the previous 5 years. Unused amounts older than that expire. It is genuinely useful after a career break or a period of part-time work, and it is the one situation where a much larger single-year sacrifice is both possible and sensible. We do not model it here, because it needs your balance and five years of contribution history.

Where these rules come from

Not modelled, and worth knowing: the 5-year carry-forward of unused cap, which needs your total super balance and your contribution history; the treatment of amounts over the cap beyond flagging that they buy nothing; and the parts of Division 293 income beyond salary and contributions. If your loan is the reason you are here, the HECS repayment calculator shows what repayment income actually drives. The methodology page lists what every calculator here does and does not do.