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Can my salary be paid into a family trust?

The national full-time average salary is $108,352 per year, but whether your salary can be paid into a family trust depends on your employment structure, not the amount.

This sits on the Australian full-time average.

Week, hour, and a tax sketch

$2,084 a week · $54.83 an hour if spread over 38 hours

About $83,159 after resident income tax and a 2% Medicare levy.

2026–27 resident rates and a 2% Medicare levy. Not a tax assessment.Open the full line

Can my salary be paid into a family trust?

A family trust is a legal structure that holds assets and distributes income to its beneficiaries. Many people ask whether their employer can pay their salary directly into a family trust rather than into their personal bank account. The short answer is: it depends on your employment arrangement and the structure of your work.

How salary is normally paid

For most employees, salary is paid directly to the individual. The employer withholds Pay As You Go (PAYG) tax and makes superannuation contributions. The employee reports the salary in their personal tax return. This is the standard model under the Fair Work Act and the ATO’s withholding rules.

When a trust can receive your salary

There are a few scenarios where salary or fees can be paid into a family trust:

  • Salary sacrifice: Some employers allow you to sacrifice part of your salary to a trust, but this must be for future benefits (such as superannuation) and not simply to redirect income to family members. The ATO scrutinises these arrangements closely.
  • Contractor or business structure: If you operate your business through a trust (e.g., as a consultant or freelancer), your clients may pay the trust directly. This is common for professionals like IT contractors, medical practitioners, or tradespeople who have set up a trust.
  • Director of a company: If you are a director of a company that contracts services through a trust, the company can pay the trust. However, the personal services income (PSI) rules may apply if you are an individual providing your own skills.

Tax implications and ATO rules

If your salary is paid into a family trust, the trust must distribute the income to its beneficiaries each year. Beneficiaries then pay tax at their marginal rates. This can be tax-effective if beneficiaries have lower incomes (e.g., a spouse or adult children). However, the ATO has strict anti-avoidance provisions. The PSI rules can deem the income as yours personally if you are the main service provider, meaning the trust structure may not reduce tax. Additionally, the ATO requires that salary sacrifice arrangements be genuine and not a scheme to avoid tax.

How your salary compares to the national average

The national full-time adult average ordinary-time earnings are $2,083.70 per week, or about $108,352 per year (ABS Average Weekly Earnings, May 2026). This is the figure used by the Average line tool as the benchmark. The full-time median salary is about $90,532 per year, and the all-employees median is about $74,100 per year (ABS Employee Earnings, August 2025). The national minimum wage from 1 July 2026 is $26.44 per hour, $1,004.90 per week, or about $52,255 per year on a 38-hour week.

If your salary is paid into a trust, the gross amount is still your salary for tax purposes, but the trust’s distribution may affect how much tax you ultimately pay. The Average line tool can show where your salary sits relative to these benchmarks.

State full-time averages

Full-time average salaries vary by state and territory. The latest figures (ABS Average Weekly Earnings, May 2026) 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

These are averages, not medians. If you live in a state with a higher average, your salary may be above the national line even if it feels modest.

Using the Average line tool

You can place a salary on the line to see how it compares to the national full-time average, median, and minimum wage. The tool shows your salary as a yearly figure, a weekly amount, and an hourly rate based on a 38-hour week. It also shows the distance from the national average. For more on how these figures are set, see How the figures are set.

Practical steps if you want to use a trust

If you are considering having your salary paid into a family trust, here are some steps:

  1. Check your employment contract: Most standard employment contracts require payment to the individual. You may need to negotiate a salary sacrifice arrangement or change your work structure.
  2. Seek professional advice: A tax accountant or lawyer can advise on whether a trust is suitable and how to comply with ATO rules.
  3. Understand the PSI rules: If you are providing personal services, the ATO may treat the income as yours regardless of the trust structure.
  4. Consider the costs: Setting up and maintaining a trust has ongoing administrative and accounting costs.

Conclusion

While it is possible for your salary to be paid into a family trust in certain circumstances, it is not the norm for standard employment. The ATO has clear rules to prevent tax avoidance, and most employers will only pay the individual employee. If you are a contractor or business owner, a trust can be a legitimate structure, but it must be set up correctly. Always consult a professional before making changes to how your salary is paid.

For more information on salary comparisons and the national average, explore the Guides section or About this site.

Questions

Can my employer pay my salary directly into a family trust?

Generally, no. Most employers pay salary to the individual employee. A family trust can receive salary only if you have a valid salary sacrifice arrangement (e.g., for future benefits) or if you are a contractor operating through a trust. The ATO requires that salary sacrifice be genuine and not simply to redirect income to family members.

What are the tax benefits of having salary paid into a family trust?

A family trust can distribute income to beneficiaries with lower marginal tax rates, potentially reducing overall tax. However, the ATO has anti-avoidance rules (Part IVA) and personal services income (PSI) rules that may apply if you are providing your own skills. Professional advice is essential.

How does the national average salary compare if I use a trust?

Your salary amount doesn't change – the national full-time average is $108,352 per year (ABS Average Weekly Earnings, May 2026). The trust affects how that income is taxed and distributed. Use the Average line tool to see where your salary sits relative to the average, median, and minimum wage.

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