A bonus is the most tempting money you will ever receive — and the most heavily taxed. Because a bonus lands on top of your salary, it is taxed at your highest marginal rate, so a $10,000 bonus might only put $6,100 to $6,800 in your pocket. Salary sacrificing that bonus into super instead can rescue a large slice of it from tax. But it is not right for everyone, and getting the timing or the cap wrong can wipe out the benefit.
The core maths is simple: money you take as cash is taxed at your marginal rate plus the 2% Medicare levy, while money sacrificed into super is taxed at just 15% inside the fund. On a $10,000 bonus, that difference is worth $1,700 if your marginal rate is 30%, $2,400 at 37%, and $3,200 at 45%. This guide explains when sacrificing a bonus works, when it does not, and the traps — the concessional cap, the SG calculation, and Division 293 — that catch people out. Run your own numbers with our free salary sacrifice calculator.
Should you salary sacrifice your bonus? The short answer
Salary sacrificing your bonus into super is usually worth it if you meet most of these conditions: your marginal tax rate is 30% or higher, you have room under the $30,000 concessional contributions cap, you do not need the cash for debts or near-term goals, and you are comfortable locking the money away until retirement. It is usually not worth it if you are on a low marginal rate, are already at or near the concessional cap, carry high-interest debt, or need the cash within the next few years.
| Your marginal tax rate | Cash in hand from a $10,000 bonus | In super after 15% contributions tax | Tax saved by sacrificing |
|---|---|---|---|
| 16% (+ 2% Medicare) | $8,200 | $8,500 | $300 |
| 30% (+ 2% Medicare) | $6,800 | $8,500 | $1,700 |
| 37% (+ 2% Medicare) | $6,100 | $8,500 | $2,400 |
| 45% (+ 2% Medicare) | $5,300 | $8,500 | $3,200 |
The table assumes no HECS-HELP repayment and no Medicare levy surcharge effects. Note the first row: at the 16% marginal rate, the saving is only $300 per $10,000 — barely worth the paperwork and the loss of access. The strategy gets powerful at 30% and above, which is where most bonus recipients sit.
How salary sacrificing a bonus actually works
Salary sacrifice is an agreement you make with your employer before the bonus is paid — this timing is non-negotiable. You agree to forgo part or all of your bonus in exchange for your employer making an equivalent super contribution. Because you never legally receive the sacrificed amount as salary, it is not counted as your assessable income. Instead, your super fund pays 15% contributions tax on it, and the rest is invested for your retirement.
Three practical points matter. First, the agreement must be prospective: you cannot sacrifice a bonus that has already been paid or that you are already entitled to receive — the ATO treats that as your income regardless of what you do with it afterwards. Second, you need to put the arrangement in writing with your employer, ideally well before bonus season, and confirm it will be processed as a concessional contribution. Third, sacrificed amounts count toward your $30,000 concessional contributions cap for the financial year, alongside your employer’s super guarantee contributions.
The concessional cap: the trap that matters most
For 2025–26, the concessional contributions cap is $30,000. This single cap covers your employer’s super guarantee (12% of your ordinary time earnings), any salary sacrifice amounts, and any personal contributions you claim a tax deduction for. On a $120,000 salary, SG alone uses about $14,400 of the cap, leaving roughly $15,600 of room. On a $200,000 salary, SG uses about $24,000, leaving only $6,000 — so a $10,000 bonus sacrifice would breach the cap by $4,000.
Going over the cap is not catastrophic, but it erases the benefit: the excess is added back to your taxable income and taxed at your marginal rate, with a 15% offset for the tax your fund already paid, plus interest charges. You can withdraw up to 85% of the excess to help pay the bill. The lesson is to check your cap room before you sacrifice — your myGov ATO account shows your concessional contributions to date, and if your total super balance was under $500,000 at the previous 30 June, you may also have unused cap amounts carried forward from the last five years.
When sacrificing a bonus is a clear win
- High marginal rate: At 37% or 45%, the saving is $2,400–$3,200 per $10,000 — an immediate, guaranteed, risk-free return that no investment can match.
- Bonus pushes you into a higher bracket: A bonus that tips part of your income over $135,000 or $190,000 is taxed at 37% or 45% on that slice. Sacrificing the bonus can keep you under the threshold entirely.
- You are close to retirement: If you can access your super soon, the “locked away” objection largely disappears, and the tax saving is close to free money.
- You want to reduce a HECS repayment or Medicare levy surcharge: Sacrificing reduces your taxable income, which can lower HECS repayments and, in some cases, keep you under surcharge thresholds.
When you should take the cash instead
- High-interest debt: Paying off a credit card at 20% interest beats a one-off tax saving of 15–30% every time, because the interest saving compounds year after year.
- No emergency fund: Money in super cannot bail you out of a broken car or a lost job. If you have less than three months of expenses saved, take the cash.
- Near-term goals: A house deposit, a wedding, or study costs in the next few years argue for cash — super preservation rules generally lock the money away until age 60.
- Low marginal rate: At 16%, the saving is only $300 per $10,000, and the loss of flexibility is not worth it.
- Division 293 territory: If your income plus concessional contributions exceed $250,000, an extra 15% tax applies to some or all of your concessional contributions, halving the benefit. At that level, get personal advice before sacrificing.
Does sacrificing a bonus reduce your employer’s super guarantee?
This is a common worry, and the law is on your side: since 1 January 2020, employers cannot use salary sacrificed amounts to reduce their super guarantee obligations. Your SG must be calculated on your full ordinary time earnings, including the amount you sacrifice. However, it is still worth checking your payslip — errors happen, and a shortfall in SG is money you should chase up. Also confirm whether your bonus itself attracts SG: bonuses that are ordinary time earnings do, but some bonuses (such as genuine overtime-related payments) may not.
Bonus sacrifice vs other options
Sacrificing into super is not the only way to handle a bonus. Taking the cash and making a personal deductible contribution to super achieves a similar tax result, with one advantage: you can decide the amount after the financial year ends (up to your tax return), when you know your exact cap room — but you must lodge a notice of intent to claim a deduction and have it acknowledged before you lodge your return. Alternatively, if you have a mortgage, putting the bonus into an offset account saves non-deductible interest at your home-loan rate while keeping the money accessible — often the best middle ground for people who value flexibility. For most employees, the ranking is: high-interest debt first, emergency fund second, then super sacrifice or offset depending on how much you value access to the money.
Frequently asked questions
Can I salary sacrifice a bonus I have already received?
No. The arrangement must be made before you become entitled to the bonus. Once the bonus is paid to you, it is your assessable income, and contributing it to super afterwards is a personal contribution — which can still be tax-deductible if you lodge a notice of intent, but it is not salary sacrifice.
How much tax do I save by sacrificing a $10,000 bonus?
At a 30% marginal rate, about $1,700; at 37%, about $2,400; at 45%, about $3,200. These figures compare cash in hand after tax and Medicare with the $8,500 that lands in super after the 15% contributions tax.
Does a sacrificed bonus count toward the $30,000 concessional cap?
Yes. Sacrificed amounts count toward the same $30,000 cap as your employer’s super guarantee contributions and any personal deductible contributions.
What happens if I exceed the concessional cap?
The excess is added to your taxable income and taxed at your marginal rate, with a 15% offset for tax already paid by the fund, plus interest. You can elect to release up to 85% of the excess from super to pay the bill.
Does salary sacrificing a bonus affect my take-home pay?
Yes, by design — you forgo the cash. But it also reduces your taxable income, which can lower your PAYG withholding, HECS repayments and Medicare levy surcharge exposure for the year.
Is salary sacrificing a bonus worth it on a low income?
Usually not. At a 16% marginal rate the saving is only about $300 per $10,000, and you lose access to the money until retirement. Cash is generally more useful at lower incomes.
The bottom line
Salary sacrificing your bonus into super is one of the most reliable tax strategies available to Australian employees — but only when the conditions line up: a marginal rate of 30% or more, room under the $30,000 concessional cap, no high-interest debt, and no near-term need for the cash. Check your cap room first, get the agreement in writing before the bonus is paid, and run the numbers through the salary sacrifice calculator. Done right, a $10,000 bonus can put $8,500 into your retirement fund instead of $6,100 into your pocket — and that difference, compounded over decades, is substantial.