Salary Sacrifice for Teachers to Maximise Your Tax Savings

• Tax
• ||
• November 2, 2025

If you’re a teacher employed by the Department of Education or a private school, you may have access to a range of salary sacrifice or salary packaging options that can help you keep more of your income.

Salary sacrificing for teachers simply means redirecting part of your pre-tax salary towards specific benefits — like extra super contributions, professional tools, or novated car leases — before tax is calculated. This lowers your taxable income and can help you save more in the long run.

Let’s break down how it works, what you can include, and whether it’s the right move for you.

What Is Salary Sacrifice and How Does It Work for Teachers?

Salary sacrifice (also known as salary packaging) is an arrangement between you and your employer where part of your before-tax salary is used to pay for approved benefits.

For teachers, these benefits are usually managed through the Department of Education salary sacrifice program (or DET salary packaging) depending on your state or employer. Essentially, your employer deducts certain expenses or contributions before calculating your tax — helping you reduce your taxable income and boost your financial outcomes.

In other words, salary sacrifice lets teachers exchange part of their salary today for financial advantages tomorrow.

What Can Teachers Salary Sacrifice?

Teachers generally have several options when it comes to salary packaging. These may include:

• Superannuation contributions – Boost your retirement savings through pre-tax super contributions.
• Portable electronic devices – Laptops, tablets, or mobile phones used primarily for work.
• Novated car leases – Package a vehicle under a three-way agreement between you, your employer, and a leasing company.
• Professional development expenses – Training or education directly related to your job.

One common question is: can teachers salary sacrifice mortgages?
Unfortunately, under most Department of Education and public sector salary packaging policies, mortgage payments aren’t eligible for salary sacrifice. You can, however, maximise your savings through other pre-tax benefits like super contributions or vehicle leases.

Benefits of Salary Sacrifice for Teachers

Salary sacrificing can offer a range of benefits for teachers, including:

• Reduced taxable income – Paying for benefits pre-tax can lower how much income tax you owe each pay cycle.
• Faster super growth – Contributing to super through salary sacrifice means your retirement savings grow faster thanks to compound returns.
• Simplified financial management – Bundling eligible expenses through payroll can make budgeting easier.
• Access to ATO-approved benefits – All benefits must comply with the Australian Tax Office (ATO) and Department of Education guidelines, ensuring compliance and peace of mind.

When structured correctly, teacher salary packaging can lead to noticeable tax savings and a healthier financial position over time.

Example: How Salary Sacrifice into Super Works for Teachers

Let’s take a simple example.

Suppose Sarah, a full-time teacher earning $85,000 a year, decides to salary sacrifice $200 a month into her super. Over a year, that’s $2,400 redirected from her pre-tax salary.

Because the contribution is made before tax, Sarah pays less income tax while increasing her retirement savings. Her employer contributes the sacrificed amount to her super fund, which is taxed at just 15% — lower than her marginal tax rate.

This small change can boost her super balance by tens of thousands of dollars over her career.

Important Considerations Before Salary Sacrificing

Before setting up a salary sacrifice arrangement, teachers should keep the following in mind:

• Check your eligibility – Not all education departments or schools offer the same salary packaging options.
• Understand contribution limits – The salary sacrifice super limit forms part of your concessional (before-tax) contribution cap.
• Review your overall benefits – Make sure your take-home pay still covers everyday expenses comfortably.
• Stay compliant – Ensure all benefits meet ATO and Department of Education rules.

If you’re considering salary sacrificing specifically for super, see our related guide: Salary Sacrificing to Super – How It Works in Australia.

How to Set Up Salary Sacrifice as a Teacher

Getting started is straightforward, but it’s important to follow the right steps:

1. Review your employer’s salary packaging policy — Each education department or school has specific approved benefits.
2. Seek approval — You may need to submit a written request or form through HR or payroll.
3. Confirm contribution details — Decide how much of your pre-tax salary to allocate to each benefit.
4. Monitor and adjust — Review your payslips and super contributions regularly to ensure everything aligns with your goals.

Teachers working under the Department of Education salary sacrifice program can usually manage these changes via their HR or payroll portal.

Get Expert Help Before You Commit

While salary sacrifice can be highly beneficial, it’s not one-size-fits-all. The right structure depends on your income, tax bracket, super balance, and long-term goals.

If you’re unsure how to make the most of your teacher salary packaging options, our team can help you review your current setup and identify the most tax-effective approach.

Reach out today for personalised salary sacrifice advice and make sure your teaching income is working as hard as you do. Contact us for a free consultation.

ALSO READ:

Mortgage salary sacrifice – all you need to know

Pros and cons of salary packaging

Understanding salary sacrificing for employers & employees plus FBT

Salary sacrificing a car – benefits & implications