Salary sacrifice means directing part of your pre-tax income into your super fund. It reduces your taxable income, which can lower your PAYG withholding and increase your retirement savings.
How it affects taxable income: Salary sacrifice amounts are deducted from your gross income before tax is applied. This can reduce your overall tax liability depending on your income level.
How it affects take-home pay: Your take-home pay decreases because you are giving up a portion of your salary, but your tax payable may also decrease. This makes salary sacrifice a common long-term savings strategy.
Contribution caps: Concessional contributions (employer super + salary sacrifice) are capped annually by the ATO. Excess contributions may incur additional tax.
Super vs regular pay: Employer SG contributions are separate and not taken from your take-home pay. Salary sacrifice contributions come from your salary before tax.
How this calculator handles salary sacrifice: This simplified model does not include salary sacrifice. It calculates PAYG and Medicare based solely on your ordinary income inputs.
Call to action: Speak with your employer or a financial professional before setting up salary sacrifice. Use this calculator to estimate your take-home pay before adding any sacrifices.