Turning 60 changes the superannuation equation. You can now access your super, you are closer to retirement than to your first job, and the question shifts from “should I sacrifice salary into super?” to “is there still time for it to pay off?” For many Australians over 60, the answer is still yes — but the reasons are different, the time horizon is shorter, and a few traps that barely mattered at 40 now matter a lot. This guide works through the maths, the caps and the retirement-timing issues so you can judge whether salary sacrifice after 60 is worth it for you.
To model your own numbers, try the salary sacrifice calculator and the super calculator.
Why the Answer Changes After 60
Before 60, salary sacrifice is mainly a long game: contribute pre-tax dollars, pay 15% contributions tax inside the fund instead of your marginal tax rate, and let decades of compounding do the rest. After 60, two things change. First, you have reached preservation age — 60 for anyone born after 1 July 1964 — so you can access your super if you retire or start a transition-to-retirement pension. Money sacrificed now is not locked away for decades; it may be accessible within a few years, or even within the same year through a transition-to-retirement strategy. Second, the compounding horizon is short, so the immediate tax saving matters more than long-term growth. A strategy that saves tax this year is valuable even if it only compounds for three or five years.
That shorter horizon also means mistakes cost more, proportionally. Exceeding a cap, sacrificing income you need for living costs, or triggering extra tax leaves less time to recover. The strategy needs to be sized carefully, not set on autopilot.
The Tax Saving: Still the Core Benefit
The basic maths has not changed. Salary sacrificed into super is taxed at 15% inside the fund (plus an extra 15% Division 293 tax if your income plus concessional contributions exceed $250,000, taking the total to 30% on the affected portion), instead of at your marginal income tax rate. Under the 2025–26 resident rates, that marginal rate is 30% for income between $45,001 and $135,000, 37% to $190,000, and 45% above that, plus the 2% Medicare levy.
For someone earning $120,000 and sacrificing $10,000, the saving is straightforward: $10,000 taxed at 30% plus Medicare would cost about $3,200 in tax as salary, but costs $1,500 as a concessional contribution — a saving of roughly $1,700 in that year. For someone on $80,000 sacrificing $10,000, the marginal rate is also 30%, so the saving is similar. For someone on $45,000 or less, the marginal rate is 16% or lower, so the 15% contributions tax barely saves anything — salary sacrifice after 60 is much less attractive at lower incomes, and may not be worth the reduced take-home pay at all.
| Taxable income (2025–26) | Marginal rate + Medicare | Tax on $10,000 as salary | Tax as super contribution | Approx. saving |
|---|---|---|---|---|
| $50,000 | 30% + 2% | $3,200 | $1,500 | $1,700 |
| $90,000 | 30% + 2% | $3,200 | $1,500 | $1,700 |
| $150,000 | 37% + 2% | $3,900 | $1,500 | $2,400 |
| $260,000 (Division 293 applies) | 45% + 2% | $4,700 | $3,000 | $1,700 |
| $40,000 | 16% + 2% | $1,800 | $1,500 | $300 |
These figures exclude offsets and the effect of the contribution on taxable income itself, which can also affect Medicare levy surcharge, private health insurance thresholds and other income-tested benefits. They are a guide, not a personal tax calculation.
The Caps: $30,000 Concessional Cap and Carry-Forward
The concessional contributions cap for 2025–26 is $30,000 a year, across all funds. That total includes your employer’s superannuation guarantee contributions — 12% of ordinary time earnings — plus any salary sacrifice and any personal deductible contributions. So the room you have left for salary sacrifice is $30,000 minus your employer’s contributions, not $30,000 on top of them.
For example, on a $120,000 salary, employer SG at 12% is $14,400, leaving $15,600 of cap room. Sacrificing more than that triggers excess concessional contributions tax treatment: the excess is added back to your taxable income and taxed at your marginal rate, with a 15% offset for the tax already paid in the fund. It is not a penalty as such, but it wipes out the benefit and creates paperwork — so staying inside the cap matters.
One exception helps many over-60s: carry-forward concessional contributions. If your total super balance was below $500,000 at the previous 30 June and you did not use your full cap in any of the previous five years, you can use the unused amounts now. Someone who took time out of work, worked part-time, or simply never salary sacrificed may have tens of thousands of dollars of unused cap available. Check your myGov ATO super information for your carry-forward balance before assuming you are limited to $30,000.
Can You Still Access the Money? Preservation and Transition to Retirement
At 60, you meet a condition of release if you retire, and you can also start a transition-to-retirement (TTR) pension while still working. A TTR pension lets you draw up to 10% of your super balance a year as income while you keep working — and, combined with salary sacrifice, it creates the well-known strategy of sacrificing salary into super while drawing a pension income to replace it, saving tax on both sides.
That strategy still works after 60, but its value depends on your tax position. Pension income from a taxed super fund after 60 is generally tax-free, so replacing taxable salary with tax-free pension income while sacrificing salary at 15% can produce a genuine saving. It is, however, more complex than plain salary sacrifice: it involves pension establishment, minimum and maximum drawdown rules, and the interaction with your fund’s tax. It is worth professional advice before starting, particularly if your balance is large or your work pattern is irregular.
There is also a simpler point: after 60, sacrificed money is not locked away until 65 or 67. If you retire at 62, you can access it then. The “I can’t touch it for decades” objection that puts younger workers off salary sacrifice simply does not apply in the same way after 60.
When It Is NOT Worth It After 60
Salary sacrifice is not automatically smart after 60. It is weak or risky when your marginal tax rate is close to 15% — roughly, taxable income below $45,000 — because the saving is tiny and you lose take-home pay you may need. It is risky if you need the cash flow: sacrificed salary cannot be undone mid-year easily, and if unexpected expenses arise, the money is in super, not in your bank account (unless you can meet a condition of release). It is also poor value if you are about to exceed the concessional cap, or if you are over the Division 293 threshold and the saving shrinks to the difference between your marginal rate and 30% rather than 15% — still positive for high earners, but smaller.
Another trap is the super guarantee interaction. Salary sacrifice should not reduce your employer’s SG contributions: SG is calculated on ordinary time earnings, and a properly drafted salary sacrifice agreement keeps SG based on your pre-sacrifice salary. If your employer calculates SG on your reduced, post-sacrifice salary, you are losing super as well as take-home pay — check your payslip and agreement wording. Since 1 July 2026, payday super also requires employers to pay SG at the same time as wages, which makes this easier to spot pay by pay.
A Worked Example: Age 62, Salary $110,000
Consider someone aged 62 earning $110,000, with employer SG of $13,200. Their concessional cap room is $30,000 minus $13,200, or $16,800. They sacrifice $15,000, staying inside the cap. Taxed as salary at 30% plus Medicare, that $15,000 would have cost about $4,800 in tax. As a super contribution it costs $2,250 at 15%. The immediate saving is about $2,550. If they also draw a TTR pension to replace part of the reduced take-home pay, the cash-flow impact is softened while the tax saving remains. Even without a pension, if they can live on the reduced take-home pay for a few years, the $15,000 plus its $2,250 tax cost grows in a low-tax super environment and becomes available on retirement — a clear win for someone in the 30% bracket or above.
Contrast that with someone aged 63 earning $42,000 part-time. Their marginal rate is 16%, so sacrificing $5,000 saves only about $150 in tax after the 15% contributions tax, while cutting take-home pay by $5,000. Unless a carry-forward or TTR strategy changes the picture, that sacrifice is hard to justify.
Steps to Take Before You Start
First, confirm your cap room: $30,000 minus employer SG and any other concessional contributions, plus any carry-forward amount from myGov. Second, confirm your marginal tax rate and whether Division 293 applies. Third, check that your salary sacrifice agreement preserves your SG on your full salary. Fourth, decide how much take-home pay you can genuinely afford to give up — and whether a TTR pension is part of the plan. Finally, put the arrangement in writing with your employer before the pay period it applies to; salary sacrifice only works prospectively, not retrospectively on pay already earned.
Frequently Asked Questions
Is there an age limit for salary sacrifice into super?
No. There is no upper age limit for salary sacrifice or concessional contributions while you are working, provided you meet the relevant fund and tax rules. The concessional cap applies at any age.
What is the concessional cap for 2025–26?
$30,000 a year, including employer SG contributions, salary sacrifice and personal deductible contributions combined.
Can I access salary sacrificed super after 60?
Yes, if you meet a condition of release such as retirement after preservation age (60), or through a transition-to-retirement pension while still working, subject to the pension’s 10% annual maximum.
Does Division 293 tax apply after 60?
Yes, if your income plus concessional contributions exceed $250,000 in a year, an extra 15% tax applies to some or all concessional contributions, taking their tax rate to 30% on the affected portion.
Will salary sacrifice reduce my employer’s super contributions?
It should not, if the agreement is drafted correctly. SG is calculated on ordinary time earnings, and your pre-sacrifice salary should be the base. Check your payslip to confirm.
Is salary sacrifice worth it on a low income after 60?
Usually not. If your marginal rate is 16% or less, the 15% contributions tax leaves almost no saving, and the loss of take-home pay is rarely justified.
Conclusion
Salary sacrifice after 60 is still worth it for many workers — particularly those in the 30% tax bracket or above, with cap room to spare, who can afford the reduced take-home pay. The shorter horizon is offset by preservation age: the money is not locked away for decades, and a transition-to-retirement pension can soften the cash-flow impact. It is not worth it on a low income, above the cap, or at the cost of your employer’s super contributions. Run your own numbers with the salary sacrifice calculator, check your cap room on myGov, and consider professional advice before combining it with a pension strategy.