On this page (9 sections)
The short answer
Salary sacrificing into super swaps salary taxed at your marginal rate (32% for most teachers) for super taxed at 15%. A NSW Step 3 teacher on $104,156 who sacrifices $10,000 in 2026–27 takes home $6,800 less but gets $8,500 more in super: a $1,700 gain. Employer super plus sacrifice must stay under the $32,500 cap.
- Your employer must still pay 12% on your full pre-sacrifice salary.
- Your HELP repayment doesn't fall, because sacrificed super is added back.
- Below about $45,000 of income, the gain all but disappears.
- The money is locked away until preservation age (60) and a condition of release.
How salary sacrifice works for teachers
You ask payroll to pay part of your salary into super before tax is calculated. That part isn't taxed at your marginal rate. Instead, your fund deducts 15% contributions tax when it arrives. For a teacher in the 30% bracket, that's 32c (tax plus Medicare levy) saved minus 15c paid, so you're ahead by 17c on every dollar.
Two protections apply. Your employer must keep paying Super Guarantee on your full salary as if you hadn't sacrificed, because qualifying earnings include sacrificed amounts. And in NSW, the teachers' award lets you sacrifice up to 100% of salary into super, so the employer can't cap you at an arbitrary amount.
Worked examples at real 2026–27 salaries
NSW Step 3 teacher ($104,156) sacrifices $10,000
- Taxable income falls to
- $94,156
- Tax and Medicare before
- $23,850
- Tax and Medicare after
- $20,650
- Tax saved
- $3,200
- Take-home falls by
- $6,800 (from $80,306 to $73,506)
- Into super after 15% contributions tax
- $8,500
- Cap check: $12,499 employer + $10,000
- $22,499, under $32,500
Calculated with our 2026–27 tax engine. HELP repayment stays at $5,194 with or without the sacrifice.
Tax saved includes Medicare levy. All examples stay under the $32,500 concessional cap including 12% employer super. HALT and Head Teacher examples save more because part of the income is in the 37% bracket.
Free calculator
Model salary sacrifice at your step
Enter your state, step and how much you'd sacrifice. See the fortnightly cost, the tax saving and the effect on your balance at retirement.
Try the super calculatorThe $32,500 cap: don't go over
The concessional contributions cap for 2026–27 is $32,500, up from $30,000. It covers everything taxed at 15% going in: your employer's 12%, salary sacrifice and any personal contributions you claim as a tax deduction. Go over and the excess is added to your taxable income and taxed at your marginal rate (with an offset for the 15% already paid), which wipes out the benefit.
ACT teachers on 12.5% to 13.5% employer super, and defined benefit members, have less room. DB members must use their scheme's notional taxed contributions.
The HELP catch
Salary sacrifice cuts your income tax, but it doesn't cut your HELP repayment. Sacrificed super is a reportable super contribution, and those are added back into your repayment income. The same applies to the Medicare levy surcharge income test and some government payments.
NSW Step 3 teacher with a HELP debt sacrifices $10,000
- HELP repayment without sacrifice
- $5,194
- HELP repayment with $10,000 sacrifice
- $5,194
- Take-home with HELP, no sacrifice
- $75,112
- Take-home with HELP, $10,000 sacrifice
- $68,312
Calculated with our 2026–27 engine.
When salary sacrifice isn't worth it
- Low income. If your income is under $45,000 (for example a CRT working two days a week), your marginal rate is 15% to 17%, about the same as the 15% contributions tax. The tax saving disappears. People with adjusted taxable income up to $37,000 currently get the low income super tax offset, which refunds contributions tax on concessional contributions up to $500.
- You need the money sooner. Super is locked away until preservation age (60 for anyone born after 30 June 1964) and a condition of release. A house deposit, emergency fund or high-interest debt usually comes first.
- You're near the cap. Senior teachers and principals with high employer contributions can quickly hit $32,500.
- You're in a defined benefit scheme. Extra contributions may work differently, and notional contributions may already use your cap.
- High income near Division 293. If your income plus concessional contributions exceeds $250,000, extra contributions are taxed at 30%, not 15%. Rare for teachers, but possible for senior principals.
Salary sacrifice vs personal deductible contributions
Both count toward the $32,500 concessional cap, both are taxed at 15% in the fund, and both are added back for HELP.
Salary sacrifice
- Set up through payroll; comes out before tax each pay
- Tax saving is immediate in every pay
- Automatic and easy to stick to
- Needs your employer's payroll to support it
Personal deductible contribution
- You pay into super from your bank account, any time
- You send your fund a notice of intent to claim, and get acknowledgement, before lodging your return
- Tax saving arrives when you lodge your return
- Flexible: good for using carry-forward room in a lump sum before 30 June
Using super for your first home deposit
The First Home Super Saver Scheme lets you make voluntary contributions, including salary sacrifice, and later release them (with deemed earnings) to buy your first home. Up to $15,000 of voluntary contributions a year, and $50,000 in total, can count. For a teacher saving a deposit, this keeps the 15% tax rate on savings that would otherwise be taxed at 32%. The release process has strict steps, so read the ATO's FHSS guidance before you sign a contract. See also teacher home loans.
How to set it up
Starting salary sacrifice
- 1
Work out the amount
Decide what fortnightly drop in take-home you can live with. Use the calculator to convert it into an annual sacrifice and check the cap.
- 2
Check your employer super
Look at your payslip or fund statement to confirm your employer rate (12%, or 12.5% in the ACT and 12.75% in Queensland state schools) and that it's paid each pay.
- 3
Submit the form
Government departments usually take a salary sacrifice request through their employee self-service portal or a payroll form. Catholic and independent schools use their payroll or packaging provider.
- 4
Check your first payslip
The sacrifice should show as a pre-tax deduction, your PAYG tax should fall, and employer super should still be 12% of your full salary.
- 5
Review each year
Pay rises, step increases and cap changes affect how much room you have. Review every July.
Frequently asked questions
Is salary sacrificing super worth it for teachers?
How much can a teacher salary sacrifice into super?
Does salary sacrifice reduce my employer super?
Does salary sacrifice reduce HECS repayments?
Can casual teachers salary sacrifice super?
Can I salary sacrifice in the ACT with the 13.5% super deal?
What happens if I go over the concessional cap?
Sources we checked · last verified 2026-10-16
About this page
Written and fact-checked by the TeacherPay AU editorial team against the enterprise agreements, awards and official pages listed in the sources. It is general information, not personal financial, tax or legal advice. Spotted something out of date? Tell us and we'll fix it, usually within a day. See our editorial policy and how we calculate.
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