Most Australians wait for a pay rise to feel better off. Yet take-home pay is not set by salary alone: tax, super, HECS repayments, deductions and how your pay is structured all shape what lands in your bank account. Change a few of those levers and you can keep more of the pay you already earn — without asking your employer for an extra dollar.
None of these strategies is free money. Salary sacrificing into super means money you cannot touch until retirement, and a deduction only helps if the expense was genuinely work-related. The aim is to avoid tax you did not need to pay and deductions you forgot to claim. This guide uses 2025–26 figures throughout — check them for your salary with our income tax calculator before changing anything.
Where your pay goes in 2025–26
For Australian residents in 2025–26, income tax is charged at these marginal rates, before the Medicare levy of 2%:
| Taxable income | Tax on this income |
|---|---|
| $0 – $18,200 | Nil |
| $18,201 – $45,000 | 16c for each $1 over $18,200 |
| $45,001 – $135,000 | $4,288 plus 30c for each $1 over $45,000 |
| $135,001 – $190,000 | $31,288 plus 37c for each $1 over $135,000 |
| $190,001 and over | $51,638 plus 45c for each $1 over $190,000 |
Your marginal rate is the rate on your next dollar, not your whole salary. Most strategies below work by moving income out of a higher bracket or reducing taxable income. The super guarantee rate is 12% in 2025–26, paid by your employer on top of your salary. The national minimum wage is $26.44 per hour from 1 July 2026, or $1,004.90 per week for a 38-hour week. The Low Income Tax Offset (LITO) is worth up to $700 for taxable income up to $37,500, phasing out to nil at $66,667. The ATO works it out when you lodge; it reduces tax owed but is not refundable.
1. Salary sacrifice into super
Salary sacrificing into super is usually the biggest lever for a middle-income employee. You ask your employer to pay part of your salary into your super fund as a concessional contribution, taxed at 15% inside the fund rather than at your marginal rate. The concessional cap for 2025–26 is $30,000, including employer super guarantee contributions. On a $100,000 salary, your employer already pays about $12,000 in super guarantee, leaving roughly $18,000 of cap room. Exceeding the cap means the excess is taxed at your marginal rate, removing the benefit.
Here is a worked example on a $100,000 salary, where the marginal rate is 30%:
| Step | Amount |
|---|---|
| Amount sacrificed into super | $10,000 |
| Income tax saved at 30% | $3,000 |
| Contributions tax inside super at 15% | $1,500 |
| Net tax saving | $1,500 a year |
The $1,500 is the tax saving alone. The full $10,000 also goes into your super balance, where it keeps growing in a low-tax environment until retirement. The trade-off is real: sacrificed money is preserved until preservation age — 60 for most people now — and you cannot use it for a house deposit or an emergency. Do not sacrifice money you might need before retirement. Model different amounts with our salary sacrifice calculator before signing an agreement.
2. Claim every legitimate work deduction
A deduction reduces taxable income, so you save tax at your marginal rate: a $1,000 deduction saves $300 at 30%, and $370 at 37%. That is real money — but only if the expense was genuinely incurred in earning your income, you have records, and your employer has not reimbursed you. Commonly missed deductions include work-related car expenses, tools, professional memberships, training, home office costs, and work-related phone and internet use. Keep receipts and a simple log as you go.
If you work from home, the ATO fixed rate method is simplest. For 2025–26, the rate is 70 cents per hour worked from home, verified against the ATO. It covers electricity and gas, internet, phone use, and stationery and computer consumables in one bundled figure. You cannot claim those items separately on top of it, but you can separately claim the decline in value of equipment such as a laptop, desk or chair. For example, 20 hours a week for 48 weeks is 960 hours × 70c = $672. You need a record of your actual hours across the whole year — a timesheet, roster or diary, not an estimate made at tax time.
3. Time your deductions well
Timing does not change whether a deduction is legitimate, but it can change when the benefit arrives. Paying for a large deductible expense — a course, work equipment, union fees or subscriptions — before 30 June brings the deduction into the current tax year; paying after 1 July pushes it into the next year. That matters most when your income will be lower next year, or you are close to a threshold this year. Do not buy things you do not need just for a deduction: spending $1,000 to save $300 still leaves you $700 worse off.
4. Understand how HECS affects your take-home pay
If you have a HECS-HELP debt, your employer withholds extra tax once your income reaches the repayment threshold. From 2025–26, repayments use a new marginal system:
| Repayment income | Repayment rate |
|---|---|
| Below $67,000 | No compulsory repayment |
| $67,001 – $125,000 | 15% on income in this range |
| Above $125,000 (up to $179,285) | 17% on income in this range |
You only pay the rate on income within each band, not on your whole income. But a pay rise over $67,000 can still trigger repayments that eat into the extra cash. One point needs correcting clearly: salary sacrificing into super does not reduce your repayment income for HECS purposes. Reportable super contributions are added back when the ATO calculates repayment income, so sacrificing into super will not lower your compulsory HECS repayment. Check what applies at your income with our HECS calculator before you negotiate a pay rise.
5. Check your tax withholding — and consider a PAYG variation
Many Australians get a large tax refund each year and treat it as a bonus. Usually it means too much tax was withheld: you lent the ATO your money interest-free and got it back months later. Getting withholding right does not change your total tax bill, but it changes when you receive your money.
Check your payslip: is the tax-free threshold claimed correctly, and with only one employer? Is HECS withholding applied when it should be? Small payroll errors can persist all year if nobody checks. If you expect large deductions, you can ask the ATO to vary your PAYG withholding so less tax is taken from each pay. This is called a PAYG withholding variation: the tax you would otherwise reclaim as a refund reaches your pay during the year instead. Apply through the ATO with a genuine estimate — if it is too low, you may end up with a tax bill.
6. The spouse super contribution tax offset
If your spouse earns a low income, contributing to their super can earn you a tax offset of up to $540. The full offset generally applies where your spouse’s income is low, and it reduces as their income rises. If you are already helping a low-income partner build super — while they study, care for children or work part-time — structuring that help as a spouse contribution can add a real tax benefit on top of the retirement saving. Check the income limits and eligibility rules on the ATO website first, and make sure the contribution goes to a complying super fund.
7. Review your salary packaging
Salary packaging is only available where your employer offers it. If yours does, review it once a year: the right package can reduce taxable income in exchange for benefits you would pay for anyway, while the wrong package can cost more than it saves. Common items include cars through a novated lease, laptops and work equipment, and extra super contributions. The fringe benefits tax (FBT) treatment differs for each item. Packaging something you would not otherwise buy rarely saves money, because the FBT or lease cost can outweigh the income tax saved.
Electric vehicles are the notable exception. Eligible electric cars provided by an employer, including through a novated lease, can be exempt from FBT under the Electric Car Discount. To qualify, the car must be a battery electric or hydrogen fuel cell vehicle first held and used on or after 1 July 2022, and luxury car tax must never have been payable on its first retail sale — the fuel-efficient luxury car tax threshold is $91,387 for 2025–26. Plug-in hybrids are no longer eligible for new arrangements from 1 April 2025. Even when a car is FBT-exempt, its value may still be reported as a reportable fringe benefit, which can affect other entitlements. Model the full picture with our novated lease calculator and get advice before signing a lease.
A final warning: paying for a scheme that promises to make your income disappear is a risk, not a strategy. Claiming deductions you cannot substantiate or hiding income can lead to penalties that wipe out any gain. And a pay rise still matters — it lifts your salary, super guarantee and future earning base. These strategies help you keep more of what you already earn; they do not replace negotiating your pay.
Frequently asked questions
Can I really increase my take-home pay without a pay rise?
Yes, within limits. Salary sacrificing into super, claiming legitimate deductions, correcting your withholding and using offsets you are entitled to can lift the cash you keep without your gross salary changing.
Is salary sacrificing into super always worth it?
No. It is usually worth it if your marginal rate is well above the 15% contributions tax and you can afford to lock the money away until preservation age, 60 for most people now. It is less attractive if you need the cash soon or you are close to the $30,000 concessional cap for 2025–26.
How much can I save by salary sacrificing $10,000?
On a $100,000 salary at a 30% marginal rate, sacrificing $10,000 saves $3,000 in income tax and costs $1,500 in contributions tax inside super, leaving a net saving of $1,500 a year, plus the $10,000 growing inside super.
Does salary sacrificing reduce my HECS repayment?
No. Reportable super contributions are added back when the ATO calculates repayment income, so sacrificing into super does not lower your compulsory HECS repayment. Under the 2025–26 marginal system, no repayment is due below $67,000 of repayment income, then 15% applies on income from $67,001 to $125,000.
What is the work-from-home deduction for 2025–26?
Under the ATO fixed rate method, you can claim 70 cents for each hour you work from home in 2025–26. It covers electricity and gas, internet, phone use, and stationery and computer consumables. You need a record of your actual hours, and you cannot claim those items separately.
Should I ask for a PAYG withholding variation?
Consider it if you expect large, predictable deductions and would rather receive the benefit in each pay than as a lump-sum refund. It does not reduce your total tax; you apply through the ATO with a realistic estimate.
Start with the biggest lever first
If you do one thing after reading this guide, model a salary sacrifice into super. For most middle-income earners it is the largest and most reliable saving available. Try different amounts in our salary sacrifice calculator, and confirm you have room under the $30,000 concessional cap for 2025–26 before talking to your employer. Then work through the rest of the checklist once a year: claim every deduction you are entitled to, keep records as you go, check your withholding, and review your salary packaging. Together, these steps can add up to a meaningful amount each year — money you have already earned, kept instead of lost to tax you did not need to pay.
