1. What is Salary Sacrifice?

Salary sacrifice is an arrangement where an employee agrees to receive less take-home pay in exchange for benefits of similar value, such as additional superannuation contributions. These contributions are taxed at 15% (concessional rate) rather than your marginal tax rate.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• Gross Salary — Your total annual salary before any deductions
• Sacrifice — The amount you choose to contribute to superannuation
• Taxable Income — Gross salary minus sacrifice amount
• Tax — Calculated based on 2024 Australian tax brackets
• Medicare Levy — 2% of taxable income

3. Benefits of Salary Sacrifice

Details: Salary sacrificing into super can reduce your taxable income, potentially lowering your tax bracket and increasing your retirement savings. The sacrificed amount is taxed at 15% in super rather than your marginal rate.

4. Using the Calculator

Tips: Enter your gross annual salary and the amount you wish to sacrifice to super. The calculator will show your reduced taxable income, tax payable, Medicare levy, and resulting net salary.

5. Frequently Asked Questions (FAQ)

Q1: What's the maximum I can sacrifice?
A: The concessional contributions cap is $27,500 (2024), including employer contributions. Excess may be taxed at your marginal rate.

Q2: Does salary sacrifice affect my super guarantee?
A: No, your employer must still pay 11% super guarantee on your original gross salary.

Q3: Are there age limits for salary sacrifice?
A: No age limits, but different rules apply if you're under 18 or over 75.

Q4: Can I sacrifice for other benefits?
A: Yes, common options include cars, laptops, or childcare, but super is most tax-effective.

Q5: How often can I change my sacrifice amount?
A: Typically annually, but check your employment agreement as terms vary.