If you want to put extra into super and cut your tax, there are two routes that get you to almost the same place: salary sacrifice, or making an after-tax contribution and claiming a deduction. Both are concessional contributions taxed at 15% in the fund. The difference is in the how, not usually the how much. Here is the comparison.
The two methods
Salary sacrifice. You arrange with your employer to redirect part of your pre-tax salary straight into super. You never see the money in your pay, and it is taxed at 15% in the fund instead of your marginal rate.
Personal deductible (after-tax then claim). You contribute to super from your own bank account, then lodge a notice of intent to claim a deduction with your fund and claim it in your tax return. The deduction lowers your taxable income, and the contribution is taxed at 15% in the fund.
Both count towards the $30,000 concessional cap for 2025-26, and both are taxed the same way. The Salary Sacrifice vs After-Tax calculator compares them on your numbers.
A worked example
Say you are on a 37% marginal rate (plus 2% Medicare) and want $10,000 in super:
- Either method: the $10,000 is taxed at 15% in the fund = $1,500, leaving $8,500 invested.
- Versus taking it as cash: $10,000 of salary taxed at 39% leaves you just $6,100.
So both super methods leave you about $2,400 better off than taking the cash. The end result is essentially the same whichever super route you choose — see the live figures in the Salary Sacrifice Super Calculator.
So how do you choose?
Since the tax outcome is usually identical, pick on practical grounds:
- Cash flow. Salary sacrifice spreads the contribution across every pay, so you never have to find a lump sum. The personal-deduction route needs you to have the money to contribute first, then wait for the deduction at tax time.
- Flexibility. A personal deductible contribution lets you decide the amount at the end of the year once you know your income — handy if your pay is irregular, you got a bonus, or you are self-employed.
- Set and forget. Salary sacrifice is automatic once arranged, so it is easy to stay consistent.
- Don't miss the paperwork. The personal-deduction method only works if you lodge the notice of intent with your fund and get it acknowledged before you lodge your return or withdraw. Miss it and you lose the deduction.
Watch the cap
Both methods share the $30,000 concessional cap, which includes your employer's super guarantee. Going over the cap means extra tax, so add up your employer contributions first. Higher earners should also check Division 293 tax, which can apply an extra 15% once income and contributions top $250,000.