Can I Salary Sacrifice? Understanding Its Effect on the Full-Time Average
Salary sacrifice is an arrangement where you forgo part of your pre-tax salary in exchange for benefits such as additional superannuation contributions, a car, or other non-cash items. It is a common way to reduce your taxable income, but it does not change the gross salary figure that the ABS uses to calculate the national full-time average.
How the Full-Time Average Is Measured
The national full-time adult ordinary-time average is $2,083.70 per week, or about $108,352 per year (ABS Average Weekly Earnings, May 2026, multiplied by 52). This figure is based on gross earnings before any salary sacrifice. When you ask “can I salary sacrifice,” you are essentially asking whether you can lower your taxable income without affecting your reported gross earnings. The answer is yes, but the average line remains a measure of pre-sacrifice pay.
What Moves Your Pay Above or Below the Average
Your gross salary is the primary factor that determines where you sit relative to the line. If your gross salary is above $108,352, you are above the average; if below, you are below. Salary sacrifice does not move that gross figure. However, it can affect your net pay and overall compensation package. For example, if you sacrifice $10,000 into super, your taxable income drops, but your gross salary reported to the ABS stays the same. So your position on the line is unchanged.
State and Territory Averages
If you are comparing your pay to state averages, remember that salary sacrifice does not alter your gross earnings. The state full-time averages from the on-site notes are:
- New South Wales: $109,658
- Victoria: $106,137
- Queensland: $106,064
- South Australia: $102,450
- Western Australia: $115,825
- Tasmania: $96,008
- Northern Territory: $103,173
- Australian Capital Territory: $119,090
Your gross salary relative to these figures determines whether you are above or below the state line. Salary sacrifice does not change that comparison.
Tax Implications of Salary Sacrifice
Salary sacrifice reduces your taxable income, which can move you into a lower tax bracket. For 2026–27, the resident tax rates are:
- Nil up to $18,200
- 15% from $18,201 to $45,000
- 30% from $45,001 to $135,000
- 37% from $135,001 to $190,000
- 45% above $190,000 Plus the Medicare levy of 2% (before reductions). By sacrificing part of your salary, you may reduce your tax liability, but your gross salary remains the same for the purpose of the average line.
Minimum Wage and Salary Sacrifice
Fair Work requires that after salary sacrifice, your cash wages must still meet the national minimum wage. From 1 July 2026, the minimum is $26.44 per hour, $1,004.90 per week, or about $52,255 per year on a 38-hour week. Award minimums rose by 4.75%. So even if you salary sacrifice, your employer must ensure your remaining cash pay is at least that amount. This means salary sacrifice cannot push your net pay below the legal minimum.
Medians and Salary Sacrifice
The full-time median is $90,532, and the all-employees median is $74,100 (ABS Employee earnings, August 2025). These are also based on gross earnings. Salary sacrifice does not affect your gross, so your position relative to the median is unchanged. However, if you sacrifice into super, your total retirement savings increase, which can be seen as an improvement in your overall compensation even if your gross salary is below the median.
Practical Considerations
When considering salary sacrifice, think about your overall financial goals. It can be a useful tool for reducing tax and boosting super, but it does not change the headline figure that the average line uses. If you are trying to move your pay above the average, you would need to increase your gross salary, not just rearrange it through sacrifice.
For more details on how salaries are measured, see How the figures are set. To place your own salary on the line, use Place a salary on the line.
Summary
“Can I salary sacrifice?” Yes, you can, and it can lower your taxable income. But it does not change your gross salary, so it does not affect where you sit relative to the national full-time average of $108,352. The average line is based on pre-sacrifice earnings. If you want to move your pay above the line, focus on increasing your gross salary rather than salary sacrificing. Always ensure your cash wages remain above the minimum wage after sacrifice.