Should I salary sacrifice into super?

Salary sacrifice can save significant tax if your marginal rate is above 15% (the super contributions tax rate). For someone earning $85,000 on the 30% marginal rate, every $1,000 sacrificed saves $170 in personal tax. The 2025-26 concessional cap is $30,000 total (including employer SG contributions). The higher your marginal tax rate, the bigger the benefit — but the money is locked until preservation age (60 for most Australians).

What is the super contribution cap for 2025-26?

For FY2025-26, the concessional (before-tax) contributions cap is $30,000 per year. This includes employer SG contributions, salary sacrifice, and any personal deductible contributions. The non-concessional (after-tax) cap is $120,000 per year. Exceeding the concessional cap means the excess is taxed at your marginal rate plus interest charges.

Industry fund vs retail fund — which is better?

According to APRA data, industry funds have consistently outperformed retail funds over the past 10 years. The median industry fund returned approximately 8.2% p.a. in their balanced option compared to around 7.0% for retail funds. Industry funds also tend to charge lower fees (around 0.60% investment fee vs 1.10% for retail). However, past performance is not a guarantee of future results, and individual fund performance varies significantly within each category.

What is the government super co-contribution?

If you earn less than $60,400 (2025-26) and make after-tax (non-concessional) contributions to your super, the government will match 50 cents for every dollar you contribute, up to a maximum of $500 per year. The full $500 is available if you earn $45,400 or less and contribute at least $1,000. The co-contribution reduces gradually for incomes between $45,400 and $60,400.

Super Comparison Calculator

Compare super strategies and fund types side by side. See how salary sacrifice, after-tax contributions, and your fund choice affect your retirement balance. Every rate is editable — FY2025-26 figures (last updated April 2026).

Last verified: 5 May 2026

Should I salary sacrifice or pick a different super fund?

Two levers drive super outcomes: contributions and fees/returns. Concessional contributions (SG + salary sacrifice + deductible personal) are taxed at 15% inside super vs your marginal rate outside — a big win above 30%. The 2025-26 concessional cap is $30,000; non-concessional cap $120,000. On the fund side, APRA data shows industry funds' balanced option has returned ~8.2% p.a. over 10 years vs retail ~7.0%, with fees ~0.60% vs ~1.10%. Source: APRA MySuper Heatmap; ATO.

Worked example. Age 35, $120,000 salary, $70,000 current super balance. Salary-sacrifice $10,000/yr (37% MTR → $2,200 tax saving/yr). 1% fee vs 0.6% fee on an average $300k balance over 30 years = ~$1,200/yr fee drag — a 0.4% gap compounds to $100k+ difference at retirement. At 8.2% net return, adding $10k/yr from 35 to 60 grows to ~$830,000 in contributions + growth — often more impact than picking the "best" fund each year. Combine both: cheap index-heavy fund + maxed concessional cap.

General information and estimates only — not financial, tax, or legal advice. Always verify with a licensed adviser or the ATO.

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