EV salary sacrifice and the national average
An electric vehicle salary sacrifice arrangement lets you pay for an EV and its running costs from your pre-tax salary. The ATO exempts eligible EVs from fringe benefits tax, making this a popular way to reduce your taxable income. But how does your pay after sacrifice compare to the national full-time average? This page explains how to read the same pay as a year, a week, and an hour, and where your salary sits on the line.
How salary sacrifice changes your taxable salary
When you enter an EV salary sacrifice, your employer deducts the sacrifice amount from your gross salary before tax. Your taxable income becomes your gross salary minus the sacrifice. The ATO sets the rules: for a car to be FBT-exempt, it must be a zero or low-emissions vehicle (under the luxury car tax threshold for fuel-efficient vehicles) and the arrangement must meet specific conditions. The result is that you pay less income tax and Medicare levy, and your take-home pay is higher than if you bought the car with after-tax dollars.
For example, if your gross salary is $120,000 and you sacrifice $15,000 for an EV, your taxable income is $105,000. Using the 2026–27 tax rates (nil to $18,200; 15% to $45,000; 30% to $135,000; 37% to $190,000; 45% above that, plus 2% Medicare levy), your tax on $105,000 is lower than on $120,000. Your weekly and hourly figures also change.
Reading your pay as a year, week, and hour
The on-site tool accepts a yearly salary before tax and shows it as a weekly amount (based on a 38-hour week) and an hourly rate. It also shows the distance from the national full-time average. For an EV salary sacrifice, you should enter your taxable salary after the sacrifice, not your gross package. That way, the tool reflects the income you actually pay tax on.
- Yearly: Your taxable salary after sacrifice.
- Weekly: Divide by 52. For $105,000, that's about $2,019.23 a week.
- Hourly: Divide weekly by 38. About $53.14 an hour.
Compare these to the national full-time average: $2,083.70 a week, $108,352 a year, $54.83 an hour. Your weekly figure after sacrifice is below the average, but your total remuneration (including the car) may be above.
Where your salary sits on the line
The national full-time average is $108,352 a year (ABS Average Weekly Earnings, May 2026). The full-time median is about $90,532, and the all-employees median is about $74,100 (ABS Employee earnings, August 2025). State averages vary: 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. Men's full-time average is about $113,412; women's about $100,594.
If your taxable salary after EV sacrifice is $105,000, you are above the national all-employees median but below the full-time average and most state averages. Use the Place a salary on the line tool to see exactly where you stand. You can also compare by States and territories or Job medians to see how your role and location affect the comparison.
The minimum wage and award rates
The national minimum wage from 1 July 2026 is $26.44 an hour, $1,004.90 a week, about $52,255 a year on 38 hours. Award minimums rose 4.75%. An EV salary sacrifice is generally only available to employees above the minimum wage, as the sacrifice cannot reduce your pay below the applicable award or minimum wage. Fair Work sets these minimums, and your employer must ensure your base salary after sacrifice still meets legal requirements.
Tax considerations
Because the sacrifice reduces your taxable income, you may also reduce your Medicare levy (2% of taxable income) and avoid the 2% Medicare levy surcharge if your income falls below the threshold. The ATO provides guidance on FBT-exempt EVs, including the requirement that the car's first retail price be below the luxury car tax threshold for fuel-efficient vehicles ($89,332 in 2026–27). Always check the latest ATO rulings or consult a tax professional.
Using the line tool for EV salary sacrifice
To get the most accurate picture, enter your taxable salary after the sacrifice into the tool. The tool will show your weekly and hourly rates and the distance from the full-time average. You can also see how your pay compares to industry medians using the Industry medians page. For more context on how the figures are set, see How the figures are set.
Remember, the line tool shows your salary before tax, not your total remuneration package. If you want to compare your total compensation (including the EV benefit), you would need to estimate the value of the car and running costs. But for understanding your cash pay, the tool is accurate.
Summary
An EV salary sacrifice can lower your taxable income, making your reported salary appear below the national average even if your total package is competitive. Use the on-site tool to see your weekly and hourly pay after sacrifice, and compare to the full-time average, medians, and state averages. The national full-time average is $108,352 a year; your salary after sacrifice may be lower, but your take-home pay is higher than if you paid for the car with after-tax dollars. For more information, visit the Guides or About this site.