What is CBB Salary Packaging?
CBB (Community Based Benefits) salary packaging is a service that helps employees in certain sectors—such as not-for-profit organisations, charities, and public hospitals—use part of their pre-tax salary to pay for everyday expenses. This arrangement is governed by the Australian Taxation Office (ATO) and can include benefits like a car, mortgage payments, rent, school fees, or even living expenses.
Salary packaging does not change your gross salary; it redirects a portion of your pay before tax is calculated. This reduces your taxable income, which can lower the amount of tax you pay and increase your take-home pay. However, the benefits you receive may be subject to Fringe Benefits Tax (FBT), which the employer usually pays. The ATO sets annual caps on certain benefits—for example, up to $9,010 for meal entertainment and $17,000 for a car under the statutory formula.
Who Uses CBB Salary Packaging?
CBB is commonly used by employees in the community sector, including aged care, disability services, and public health. Many not-for-profit employers offer salary packaging as a way to attract and retain staff. The service is typically administered by a third-party provider, such as CBB, which handles the paperwork and compliance with ATO rules.
How Salary Packaging Affects Your Pay
When you salary package, your employer pays for the benefit on your behalf, and your salary is reduced by the same amount. For example, if your annual salary is $100,000 and you package $15,000 for a car, your taxable income becomes $85,000. You then pay tax on $85,000 instead of $100,000. The benefit itself may be exempt from FBT if it falls under a specific category, such as a car for work purposes or a portable electronic device.
It is important to note that salary packaging does not change your gross salary as reported to the ABS for average earnings calculations. The national full-time average of about $108,352 per year (ABS Average Weekly Earnings, May 2026) is based on gross ordinary-time earnings before any salary sacrifice. So if you earn $108,352 and package $15,000, your gross salary is still $108,352 for statistical purposes, but your taxable income is lower.
Tax Savings Example
Using the 2026–27 resident tax rates: nil on the first $18,200, 15% on income up to $45,000, 30% up to $135,000, 37% up to $190,000, and 45% above that. Plus a 2% Medicare levy. If you earn $108,352 (the average), your tax before packaging is roughly $24,667 plus Medicare. If you package $15,000, your taxable income drops to $93,352, reducing your tax by about $4,500 (30% of $15,000). Your take-home pay increases by that amount, minus any FBT the employer passes on.
Where CBB Salary Packaging Sits Against the Full-Time Average
CBB salary packaging is not a salary figure; it is a method of structuring your pay. The key question is how your gross salary compares to the national full-time average. If your salary is above the average, packaging can be very effective because you are in a higher tax bracket. If your salary is below the average, packaging still offers benefits but the savings are smaller.
The full-time median salary is about $90,532 (ABS Employee Earnings, August 2025), and the all-employees median is about $74,100. 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. Award minimums rose by 4.75% from that date.
State full-time averages vary: New South Wales about $109,658; Victoria about $106,137; Queensland about $106,064; South Australia about $102,450; Western Australia about $115,825; Tasmania about $96,008; Northern Territory about $103,173; Australian Capital Territory about $119,090. If you work in a state with a higher average, such as the ACT or WA, your salary is likely above the national average, making packaging more valuable.
Men’s and Women’s Averages
The ABS also reports men’s full-time ordinary-time average at about $113,412 and women’s at about $100,594. These figures highlight the gender pay gap. Salary packaging can help both groups, but women on average may have less room to package due to lower gross salaries.
Practical Considerations
Before entering a salary packaging arrangement, check with your employer whether they offer CBB or a similar service. Understand the caps and FBT implications. The ATO provides guidelines on what can be packaged without incurring FBT. Common exempt benefits include work-related items (e.g., laptops, phones) and certain car expenses under the statutory formula.
Salary packaging does not affect your superannuation guarantee, which is based on your ordinary-time earnings (before sacrifice). However, it may reduce your entitlement to some government benefits that are income-tested, such as Family Tax Benefit.
Internal Resources
To see how your salary compares to the national average, you can place a salary on the line. For state-by-state comparisons, visit the states and territories page. If you want to see median salaries by occupation or industry, check the job medians and industry medians pages. For more guides on salary and tax, see the Guides section. To understand how these figures are set, read How the figures are set. For general information about this site, visit About this site.
Conclusion
CBB salary packaging is a valuable tool for reducing tax and increasing take-home pay, especially for employees earning above the national full-time average of about $108,352. While it does not change your gross salary, it can make a significant difference to your net income. Always consult a tax professional or your employer’s salary packaging provider to ensure you stay within ATO rules and maximise your benefits.