How salary sacrifice actually works
Salary sacrifice redirects pay before it's taxed. For super, the arithmetic is simple: a dollar that would have been taxed at your marginal rate (30–47% including Medicare for most full-time earners) is instead taxed at 15% inside your fund. The difference is your saving — real money, but preserved until retirement. The calculator splits the two movements apart: what your spendable pay loses, and what your super gains after contributions tax.
FBT-exempt packaging is a different animal. Public hospitals and public benevolent institutions are exempt from fringe benefits tax up to a capped amount per employee — $9,010 a year of benefits for hospital staff, $15,900 for charity/PBI employees. Within the cap, rent, mortgage payments or living expenses are paid from pre-tax salary: at a 32% marginal rate, packaging the full charity cap is worth roughly $5,000 a year. These caps are why nurses and charity workers routinely package; standard employers have no equivalent exemption.
The HECS trap deserves its own paragraph. Packaged benefits don't escape every system: they're reported on your payment summary at a grossed-up value (multiplied by 1.8868), and that inflated figure counts toward your HECS repayment income and Medicare levy surcharge test. A charity worker on $90,000 packaging the full cap has repayment income of about $104,100 — packaging still usually wins, but by less than the brochure suggests. This calculator applies the gross-up automatically, which many don't.
Two guardrails to watch: the $30,000 concessional cap (employer super plus your sacrifice — exceed it and the 15% concession disappears), and provider admin fees, typically a few hundred dollars a year, which come off the benefit. Since 2020 your employer must still pay super guarantee on your pre-sacrifice salary, so sacrificing no longer erodes employer contributions.
Estimates use the selected year's ATO rates and standard assumptions. General information only — not tax or financial advice.