Salary Sacrifice and the National Average
A salary sacrifice arrangement lets you give up part of your pre-tax salary in exchange for benefits such as extra superannuation, a car, or electronic devices. Because the sacrificed amount is not included in your taxable income, you pay less income tax and Medicare levy. This can boost your take-home pay, even though your gross salary stays the same.
How does this affect where you sit relative to the national full-time average? The ABS Average Weekly Earnings, May 2026, puts the full-time adult ordinary-time average at $2,083.70 a week, or about $108,352 a year. This is the line on our Place a salary on the line tool. If you earn exactly that amount and sacrifice nothing, your taxable income is $108,352. Using the 2026–27 resident tax rates (nil up to $18,200, 15% to $45,000, 30% to $135,000, 37% to $190,000, 45% above), plus the 2% Medicare levy, your tax and levy total about $26,638. Your net pay is roughly $81,714 a year, or $1,571 a week on a 38-hour week.
Now suppose you salary sacrifice $15,000 into super. Your taxable income falls to $93,352. The tax on that amount is about $20,638, plus $1,867 Medicare levy, for a total of $22,505. Your net pay becomes $70,847 a year, or $1,362 a week. That is $209 a week less than the non-sacrifice scenario, but your super has grown by $15,000. Your take-home pay is now below the average line, but your total remuneration (salary plus super) is still $108,352. The How the figures are set page explains that the average is gross earnings only, not including employer super.
Tax Savings from Salary Sacrifice
The main benefit is the tax saving. Every dollar sacrificed avoids your marginal tax rate and the 2% Medicare levy. For someone on the average, the marginal rate is 30% (since $108,352 falls in the 30% bracket up to $135,000). So each $1,000 sacrificed saves $300 in tax plus $20 Medicare levy, a total of $320. The table below (not a chart) illustrates:
- No sacrifice: taxable $108,352, tax+levy ~$26,638, net ~$81,714
- Sacrifice $10,000: taxable $98,352, tax+levy ~$23,438, net ~$74,914 (plus $10,000 in super)
- Sacrifice $20,000: taxable $88,352, tax+levy ~$20,238, net ~$68,114 (plus $20,000 in super)
Notice that net pay drops by less than the sacrificed amount because of the tax saving. The difference between net pay with and without sacrifice is the tax saved, not the full sacrifice.
Comparing to Medians and Minimums
The full-time median from the ABS Employee Earnings, August 2025, is about $90,532 a year. The all-employees median is about $74,100. If you sacrifice enough to bring your taxable income to the median level, your take-home pay will be similar to someone earning that median without sacrifice. For example, if you earn $108,352 and sacrifice $17,820, your taxable income becomes $90,532. Your net pay would be about $68,500, close to the net pay of someone earning the median $90,532 (which is about $68,900 after tax).
The national minimum wage from 1 July 2026 is $26.44 an hour, $1,004.90 a week, or $52,255 a year on 38 hours. You cannot salary sacrifice below this floor. Fair Work rules require your reduced taxable salary must be at least the minimum. So if you earn $60,000, the maximum sacrifice is capped at $7,745.
State Averages and Salary Sacrifice
State full-time averages vary widely. The Australian Capital Territory has the highest at $119,090 a year. Western Australia is 115,825. New South Wales is 109,658. Victoria 106,137. Queensland 106,064. South Australia 102,450. Tasmania 96,008. Northern Territory 103,173. If you salary sacrifice, your gross salary is still compared to these state averages on our States and territories page. Your take-home pay after sacrifice may be below the state average line, but your total package remains the same.
Using a Salary Sacrifice Calculator
A salary sacrifice calculator helps you estimate the effect on your net pay. You enter your gross salary and the amount you wish to sacrifice. The calculator applies the current tax rates and Medicare levy to show your new taxable income, tax payable, and net pay. It also shows the difference from the national full-time average line. Remember that the calculator does not include other deductions like the low-income tax offset or the Medicare levy surcharge. The ATO provides the official tax tables for 2026–27.
Key Points to Keep in Mind
- Salary sacrifice does not change the ABS average. The average is based on gross ordinary-time earnings before any sacrifice.
- Your employer may charge administration fees for some benefits, which reduce the tax saving.
- Some benefits, like a car under a novated lease, have fringe benefits tax (FBT) implications that can affect your net position. The ATO provides guidance on FBT.
- Salary sacrifice into super is generally the simplest and most tax-effective option for most employees.
In summary, a salary sacrifice calculator is a useful tool to see where your take-home pay sits against the national average. It shows the trade-off between lower take-home pay and increased benefits. Use the calculator on this site to test different scenarios and see how you compare to the line.