7 strategies to reduce tax and build wealth for high income earners

If you earn $400K+, every extra dollar you make is taxed at 47 cents. That’s the 45% top rate plus the 2% Medicare levy.

Your bonus. Your commission. Your RSUs when they vest. All taxed the same way.

I call it the high income earner wealth trap. You earn more every year, but the tax bill grows faster than your wealth.

I’ve built more than 300 retirement plans over 18 years. Most people I meet in tech are paying tens of thousands more tax than they need to. One Head of Sales cut his tax by more than $90K a year after 3 meetings.

Here are the 7 strategies I use most. This is general information only. Tax rules change, so get advice before you act.

Updated October 2026. You can still borrow to invest in ETFs, and the interest is still 100% tax deductible. What the 2026 Budget changed: From 1 July 2027, losses on established investment property bought after 12 May 2026 can no longer reduce the tax on your salary, and the 50% CGT discount is replaced with indexation and a 30% minimum tax on real gains. Shares and ETFs keep the existing negative gearing rules.

How tax works when you earn $400K+

• Income over $190K is taxed at 45%, plus the 2% Medicare levy.
• RSUs are generally taxed as income when they vest, at your marginal rate, even if you don’t sell.
• If you sell shares after holding them for 12 months or more, you generally get a 50% discount on the capital gain. From 1 July 2027, that discount is replaced with indexation for inflation and a 30% minimum tax on real gains. Gains made before then keep the 50% discount.
• If your income plus concessional super contributions is over $250K, you pay Division 293 tax: an extra 15% on those contributions.

Even with Division 293, super is still taxed at 30% on the way in, not 47%. That gap is where a lot of the savings sit.

7 strategies to reduce tax and build wealth

1. Max out your concessional super contributions

The concessional cap is $30K a year, and it includes your employer’s contributions. Salary sacrifice the gap.

Every dollar you sacrifice is taxed at 15% (or 30% with Division 293) instead of 47%. On a $10K top up, that can save you $1,700 to $3,200 a year.

If your super balance was under $500K at the last 30 June, you may also be able to use unused caps from the past 5 years. That can mean a deduction of $100K+ in a big bonus year.

2. Put cash into super

You can generally put up to $120K a year of after tax money into super as a non concessional contribution. Depending on your balance, you may be able to put in up to $360K at once.

There’s no tax deduction on the way in. But earnings inside super are taxed at 15% at most, and a retirement pension from super is generally tax free from age 60.

One tech executive and his partner put $8,500 a month into super from 49. Their combined super grew from $800K to $4M in 11 years. At 60 he can draw $200K a year, tax free. Read the case study.

3. Turn your home loan into tax deductible debt

Your home loan interest isn’t deductible. Investment loan interest generally is.

Debt recycling swaps one for the other over time. You pay down the home loan, redraw the same amount through a separate split, and invest it. Your debt stays the same, but more of it becomes deductible each year.

One Head of Sales turned $700K of home loan into tax deductible debt and got $55K back. Read his case study, or see 7 powerful ways to use debt to build wealth.

2026 Budget update. This strategy was not affected by the Budget’s negative gearing changes. Those only apply to residential property. You can still borrow to invest in shares or ETFs, and the interest is still 100% tax deductible. If anything, the gap between borrowing for established property and borrowing for shares just got wider. What changed, in plain English.

4. Sell your RSUs on a plan, not on gut feel

This is the hidden tax trap in employee share schemes. You pay tax on the value at vest, even if you hold the shares. If the share price then falls, you’ve paid tax on money you no longer have.

I map every vest date and set a sell down schedule. Shares you want to keep are held for 12 months so any growth after vest may get the 50% CGT discount, or indexation for gains after 1 July 2027. Sales are spread across tax years, and losses are used to offset gains.

It also stops too much of your wealth sitting in one company’s stock.

5. Invest through the right structure

If everything is in your own name, every dollar of investment income is taxed at 47%.

A family investment trust can give you more flexibility. Income may be distributed to family members on lower tax rates, like a partner who earns less or adult children. Australian shares with franking credits can also reduce the tax on your income.

A trust has set up and running costs, and it isn’t right for everyone. Your accountant and I work out whether it suits you.

6. Bring deductions forward before 30 June

If you have an investment loan, you may be able to prepay up to 12 months of interest before 30 June and claim it in that tax year.

In a year with a big bonus or vest, that pulls a large deduction into the year you need it most. One client’s taxable income dropped by $117K with this and debt recycling together. He told me, “I used to hate June. Now I look forward to it.”

7. Use your partner’s super too

Contribution splitting lets you move up to 85% of your concessional contributions into your partner’s super each year. It evens out your balances, and it can help you both use your tax free pension limits in retirement.

If your partner earns under $40K, a contribution to their super may also give you a tax offset of up to $540.

The one thing I don’t do

I don’t buy a bad investment just for a tax deduction. Losing $1 to save 47 cents is still losing 53 cents.

Every strategy here has to build wealth first. The tax saving is the bonus.

The risks you need to know

• Tax and super rules change, sometimes every budget.
• Money in super is generally locked away until you retire after 60.
• Borrowing to invest magnifies gains and losses.
• Trusts and loan splits must be set up correctly, or deductions can be lost.

Who I do this for

My clients are tech executives and sales leaders, aged 40+, earning $400K+ with RSUs or big commissions. Most have at least $500K in super and $1M of equity in their home, and can save at least $4,000 a month above their minimum mortgage repayments.

If that’s you, there’s a good chance you’re paying more tax than you need to.