How super contributions work
Your employer pays 12% of your qualifying earnings into your super fund on top of your salary. These are concessional contributions: the fund pays 15% tax on them, instead of you paying your marginal rate.
You can add to that in two ways:
- Salary sacrifice — you agree with your employer to put part of your pre-tax salary into super. You pay no income tax on it; the fund pays 15%. It also counts towards the concessional cap.
- After-tax (non-concessional) contributions — money you have already paid tax on. No contributions tax in the fund, capped at $130,000 a year in 2026–27.
Once super is invested, earnings in the fund are taxed at up to 15% during accumulation, and withdrawals after age 60 are generally tax-free.
Worked example: $95,000 salary, sacrificing $5,000
Salary $95,000, salary sacrifice $5,000, age 35, balance $60,000
The employer contributes 12% of $95,000 = $11,400, and with the $5,000 sacrifice total concessional contributions are $16,400, well under the cap. After 15% contributions tax, the $5,000 adds $4,250 to the fund. It reduces take-home pay by only $3,400, because the tax and Medicare saved at a 32% marginal rate make up the rest.
- In today’s dollars
- $1,042,549
- Concessional contributions this year
- $16,400cap $32,500
- Take-home cost of salary sacrifice
- $3,400per year
This year · 2026–27
- Employer super guarantee
- $11,400.00
- Salary sacrifice
- $5,000.00
- Contributions tax in the fund15%
- −$2,460.00
- Salary sacrifice added to super after tax
- $4,250.00
- Reduction in your take-home pay
- −$3,400.00
- Net gain from sacrificing (super in − take-home given up)
- $850.00
The projection assumes a 6.5% annual return after fees, 3% salary growth and 2.5% inflation, and shows the balance in both future dollars and today’s dollars. Change those assumptions under “More options” — small differences in return compound into large differences over 30 years.
What changed for 2026–27
- Payday Super began on 1 July 2026.
- The maximum contribution base became annual: $270,830. Employers can stop paying the super guarantee once your qualifying earnings reach this amount in the financial year.
- The concessional cap rose to $32,500 and the non-concessional cap to $130,000, the first increase since 2024.
Tips
- Check the cap includes everything. A bonus paid with super, or a second employer, can push you over. Excess concessional contributions are taxed at your marginal rate with a 15% offset.
- Use carry-forward amounts if your balance was under $500,000 at the previous 30 June and you have not used your full cap in the last five years.
- Consolidate funds to avoid paying fees and insurance premiums twice.
- Look up lost super in myGov — the ATO holds billions in unclaimed accounts.