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Salary Sacrifice Setup Guide
Step-by-step instructions to set up salary sacrifice with your employer
Salary sacrifice is one of the simplest ways to boost your super while potentially reducing your tax bill. This guide walks you through exactly how to set it up with your employer — from working out how much to sacrifice, to the paperwork you need.
Quick Reference
Reminder: Your employer’s payroll rules can vary (minimum/maximum amounts, change windows, lead times). Use this guide as the baseline process and confirm the details with HR/payroll.
Before You Start: Work Out Your Numbers
Before approaching your employer, work out how much you can salary sacrifice without exceeding your concessional contributions cap.
📊 Calculate your salary sacrifice amount
💡 Tip: Use our Contribution Calculator to estimate cap space automatically.
Example: Sarah earns $95,000 per year. If the CC cap is $30,000 and her employer SG is $11,400, her maximum salary sacrifice is $18,600/year (about $715.38 per fortnight).
Step-by-Step: Setting Up Salary Sacrifice
Check your employer’s policy
Contact HR or payroll and confirm:
- Whether salary sacrifice is available
- Minimum / maximum amounts (if any)
- How often you can change the amount
- Which form(s) they require and lead times
Many employers support it, but some use third-party payroll providers or have restricted change windows.
Decide your amount
Choose a per pay amount (e.g., per week/fortnight/month) or a percentage — whatever your payroll system supports.
Important: Salary sacrifice must be arranged before you earn the income. You cannot retrospectively sacrifice pay you have already received.
Complete the paperwork
Your employer will typically provide a salary sacrifice agreement form. You usually need to specify:
- Amount per pay period
- Super fund details (if not the default fund)
- Start date (must be prospective)
- Whether the arrangement is ongoing or for a set period
Confirm it’s set up correctly
After your first pay with salary sacrifice:
- Check your payslip shows the salary sacrifice deduction
- Confirm your taxable income withheld looks lower (if applicable)
- Log into your super fund to confirm contributions are arriving
Monitor throughout the year
To avoid exceeding the cap, review your total concessional contributions during the year:
- Check your super fund transactions quarterly
- Factor in bonuses/pay rises (they increase SG)
- Adjust before EOFY if you’re getting close to the cap
Salary Sacrifice Checklist
✅ Before you start
✅ Setting up
✅ After first pay
Common Questions
Can I change my salary sacrifice amount?
Usually yes, but changes are for future pay periods. Some employers apply cut-off dates or monthly change windows.
Does salary sacrifice affect leave entitlements?
It depends on your employer’s policy (pre-sacrifice vs post-sacrifice salary for leave). Ask HR for their approach.
What happens if I exceed the concessional cap?
Excess concessional contributions are typically added to your taxable income and taxed at your marginal rate (with an offset for the contributions tax already paid in the fund). See our Caps & Limits guide.
Can I salary sacrifice as a casual employee?
Yes, if your employer offers it. The same “prospective arrangement” rule applies.
Where to Next?
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