Is it better to pay off my mortgage or put extra into super?

It depends on your marginal tax rate, your home loan rate, and your expected super return. Salary sacrifice is only taxed at 15% going into super (instead of your marginal rate), so it usually comes out ahead for middle-and-higher income earners — especially with a long time horizon. Paying down the mortgage gives a guaranteed, tax-free return equal to your loan rate and keeps the money accessible. The key trade-off is access: super is locked until your preservation age (generally 60), while mortgage repayments can be redrawn. Use the calculator above to compare the projected net benefit of each for your numbers.

Why is salary sacrifice into super so tax-effective?

Money you salary sacrifice is taken from your pay before income tax and is taxed at just 15% as it enters super (the concessional contributions tax). If your marginal tax rate is 32%, 37% or 45%, that's a large up-front saving compared to receiving the money as take-home pay. The investment earnings inside super are also taxed at a maximum of 15%. The catch is that the money is preserved until you reach your preservation age, and contributions over the concessional cap ($30,000 for 2025-26, rising to $32,500 from 1 July 2026, including employer SG) are taxed at your marginal rate.

Does Division 293 change the answer?

Yes. If your income plus concessional contributions is over $250,000, Division 293 applies an extra 15% tax on your concessional contributions (so they're effectively taxed at 30% rather than 15%). That narrows the tax advantage of salary sacrifice, though super can still win over a long horizon. This calculator uses the standard 15% contributions tax; high earners affected by Division 293 should treat super's projected result as the upper bound.

Super vs Mortgage Calculator

Should you salary sacrifice into super or make extra repayments on your home loan? This calculator compares the projected net benefit of each over your chosen time horizon, after tax.

Last verified: 5 May 2026

Should I pay off my mortgage or put more into super?

It comes down to tax and access. Salary sacrifice is taxed at just 15% going into super instead of your marginal rate, so for most middle-and-higher earners it builds more wealth — but it's locked away until your preservation age (generally 60). Extra mortgage repayments give a guaranteed, tax-free return equal to your loan rate and stay accessible via redraw or offset. Source: ASIC MoneySmart.

Worked example. $10,000/year of pre-tax pay over 20 years. Into super: $8,500/year (after 15% tax) at 7.5% grows to roughly $370,000. As take-home (at a 32% marginal rate) that's $6,800/year off a 6.2% mortgage, worth about $262,000 in interest saved. Super wins here by around $108,000 — but you can't touch it until 60, and a higher loan rate or lower super return narrows the gap.

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

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