First home super saver calculator

Save part of a first home deposit inside your super, then take it out with earnings set by law, not by your fund. Put in what you would sacrifice or contribute and see what comes out, the tax on it, and whether it beats the same pay in a savings account.

How much you can take out

Two limits decide what counts: $15,000 of contributions in each financial year, and $50,000 across all years. Both are measured on the full contribution, before anything is taken off, so a $15,000 salary sacrifice uses the whole year’s limit. You can put in more; the extra simply stays in your super for retirement.

What comes out is all of your counted after-tax contributions, 85% of your counted salary sacrifice, because the fund has already taken 15% tax from it, and the deemed earnings on both. That is why the $50,000 is a limit on what goes in, not on what comes out, though it is often described as the most you can withdraw. Someone who salary sacrifices the full amount can take out $42,500 plus earnings; someone who uses after-tax money can take out $50,000 plus earnings.

Contributions are counted in the order your fund received them, and when an after-tax and a salary-sacrifice contribution arrive together the after-tax one counts first. The date that matters is the day the money reached the fund, not the day it left your pay.

The earnings are the ATO’s, not your fund’s

You do not get what your fund actually earned. The law deems the earnings at the shortfall interest charge rate, the 90-day bank bill rate plus three percentage points, reset every quarter. Each counted contribution earns it from the first day of the month it arrived to the day the ATO makes your determination, compounding daily. If your fund did better, you keep the difference in super; if it lost money, the deemed amount still comes out.

The calculator runs the formula in section 138-40 contribution by contribution, rounding each one down to the dollar as the law does, and it reproduces the one table of per-contribution earnings the ATO has published, to the dollar. Two worked examples in the ATO’s current guidance carry earnings that the formula does not reproduce on any reading we tested; one appears to be a 2018 example with its dates moved two years forward. We test against the table that does. Because the earnings stop at the determination, a later contribution needs a new determination to count.

The tax when it comes out

The 85% of salary sacrifice and all of the earnings are added to your taxable income in the year you ask for the release, and you get a 30% tax offset on that amount. After-tax contributions come back untaxed. When it pays, the ATO withholds your marginal rate plus the 2% Medicare levy less 30%: 2% in the 30% bracket, 9% in the 37% bracket and 17% in the top one, or 17% if it cannot estimate. Your tax return then settles the exact figure. Here is the default saving, $10,000 a year for 3 years, at five salaries.

Two things in that table surprise people. On $40,000 the release lowers the year’s tax by $96: the 30% offset is bigger than the tax the release adds, and a non-refundable offset works against your whole income tax bill, wages included. And the gain is largest in the middle and top brackets because the salary you sacrifice would otherwise have been taxed at 32% or 39% on the way in, against 15% in the fund. The release is left out of your HELP repayment income and out of Division 293 and the Medicare levy surcharge, but it does count in your taxable income for the low income tax offset, which it can reduce.

Salary sacrifice or after-tax money

On $90,000, sacrificing $10,000 costs $6,800 of take-home pay, because that is what the $10,000 would have been after tax. Putting the same $6,800 in as after-tax contributions costs exactly the same. Over 3 years:

After-tax money only gains the gap between the deemed rate and what a bank pays you after tax, and the earnings are still taxed on the way out. Salary sacrifice adds the tax saved going in, which is where most of the benefit is. If your employer does not offer salary sacrifice, a personal contribution you claim as a tax deduction is treated the same way, 85% back and taxed on release. After-tax money still has a use if you would otherwise spend it: it is out of reach until you ask for it.

The steps, and the clocks on each

1. Ask for a determination through myGov, before you own any property, which in practice means before settlement. It shows the most you can release, and it freezes the earnings on that day.
2. Request the release, within 60 days of the determination unless the ATO allows longer. You get one request, so ask for the whole amount. It takes 15 to 20 business days to arrive, and you can withdraw or change the request until the ATO issues the release authority.
3. Sign a contract to buy or build. The window opens 90 days before your release request and closes 12 months after it, and the ATO can extend it once by up to another 12 months. If you sign first, request the release within 90 days.
4. Tell the ATO within 90 days of signing.
5. Live there for at least 6 of the first twelve months once it is practical to move in.

The home must be residential premises in Australia that you can live in, and the price must be at least what you released. Vacant land alone does not qualify, and nor do houseboats or motor homes. These 90-day rules apply to determinations made from 15 September 2024; an older determination keeps the earlier 14 and 28 days.

If you do not buy

You have two choices. Put the money back into super as an after-tax contribution, at least the assessable amount less the tax withheld, inside the same window, and tell the ATO. That counts against your non-concessional cap and ends your use of the scheme for good. Or keep it and pay FHSS tax of 20% of the assessable amount, on top of the income tax already paid. On the default figures that would be $5,734 on $28,668. Either way you cannot use the scheme a second time.

With the grant, the duty concession and the 5% Deposit Scheme

Housing Australia says the scheme can be combined with other federal or state home buying schemes. A buyer of a new home can take the scheme money, the First Home Owner Grant in their state and the first home buyer stamp duty concession together, and use a smaller deposit with the government’s guarantee in place of mortgage insurance, which the LMI calculator explains. Whether released scheme money counts toward that 5% deposit is not stated anywhere we read, so ask the lender. The ATO suggests checking whether using the scheme affects a state concession you plan to claim. The upfront costs calculator shows the cash you need on the day, which is what the scheme money is for.

What the calculator leaves out

• The tax rates of the year you release in: it uses 2026–27’s, and the 15% rate falls to 14% from 1 July 2027.
• A deduction split across a personal contribution, KiwiSaver and foreign transfers, and defined benefit members.
• Debts the ATO takes first, such as tax, child support or Centrelink, which reduce the cash it pays.
• Fund fees and insurance, which the deemed earnings ignore. Your fund can tell you what it charges.
• Whether the offset can reduce the Medicare levy. We assume not, which matters only on low incomes.
• Foreign residents for tax, who can use the scheme but pay tax on the release differently.
• A determination made before 15 September 2024, which keeps the older 14- and 28-day deadlines.