What’s the difference between personal contributions and salary sacrifice?

Care Super

Boosting your super can set you up for a financially confident future, but working out what type of contribution to make can be tricky.

That’s why we’re here to help! In this article, we break down the differences between salary sacrifice (before-tax) and personal (after-tax) contributions to help you make the right choice for your future.

Salary sacrifice

Salary sacrifice is where you ask your employer to pay part of your before-tax salary into your super. These are known as concessional contributions.

Here’s how it works:

1. You tell your employer how much you want to contribute each pay.
2. Your employer pays this on top of the legislated 11.5% super guarantee (SG) amount.¹ 
3. These contributions are made before your income tax is deducted, resulting in immediate tax benefits.

Top tip:  Stay under the before-tax (concessional) contribution cap of $30,000² to avoid paying extra tax.   

Let’s see salary sacrifice in action

Meet Sally:

• Age: 30
• Income: $80,000 per year before tax 
• Current super balance: Around $80,000 
• She salary sacrifices $100 every fortnight into super.

If Sally retires at 67, she could have an extra $141,300³ in her super account.

She’ll also have an estimated tax reduction of $832³ per year. 

What are the pros of salary sacrifice?

• It reduces your taxable income, and potentially how much tax you pay.
• Making regular extra contributions to your super over time can make a big difference to your super balance, thanks to the power of compound returns.
• Automatic and regular contributions let your super grow without having to think about it.

Things to keep in mind

• Salary sacrifice contributions are subject to the annual before-tax (concessional) contributions cap of $30,000 per year. The concessional contribution cap also includes your employer SG contributions and personal deductible contributions.
• Salary sacrifice reduces your take-home pay, so consider your current budget before opting-in.

Personal contributions

If salary sacrifice isn’t the right move for you, personal contributions, also known as after-tax contributions, might be a good option.

What are the pros of after-tax contributions?

• You may be able to claim a tax deduction. This will change the contribution to a concessional contribution to reduce your taxable income.
• Earning less than $60,400 before-tax per year?  You could be eligible for a government co-contribution.
• Your money will be invested in the tax-effective super environment, to help you build your retirement savings.

Things to keep in mind

These contributions count towards your after-tax (non-concessional) contributions cap of $110,000 per year.²

¹Increasing to 12% on 1 July 2025
²Contribution caps that apply during FY23/24
³Calculations made using Industry SuperFunds – Add extra to your super

This is general information only and doesn’t take into account your objectives, financial situation or needs. Before making a decision about CareSuper, you should consider if this information is right for you. You may also wish to consult a licensed financial adviser.

Before making a decision about CareSuper, you should consider if this information is right for you and read our Product disclosure statement, Target market determination and Financial services guide. These are available at caresuper.com.au/pds or by calling 1800 005 166.

Past performance isn’t a reliable indicator of future performance. The value of investments can rise or fall, and investment returns can be positive or negative.

CareSuper Pty Ltd (Trustee) ABN 14 008 650 628, AFSL 238718. CareSuper (Fund) ABN 74 559 365 913. Advice is provided by CareSuper Advice ABN 78 102 167 877, AFSL 284443. Consider the PDS and TMD at caresuper.com.au/pds. A copy of the Financial services guide for CareSuper is available at caresuper.com.au/fsg.’