Non Profit Salary Packaging and the National Average
Salary packaging is a common benefit in Australia’s non-profit sector, but it can cause confusion when comparing your pay to national benchmarks. This guide explains how salary packaging works, how it interacts with the full-time average, and what the official sources say.
What Is Non Profit Salary Packaging?
Non-profit salary packaging (also called salary sacrificing) lets employees of eligible charities or not-for-profit organisations pay for certain expenses from their pre-tax salary. The Australian Tax Office (ATO) sets the rules. For the 2026–27 FBT year, the general cap is $15,900 per year for items such as rent, mortgage payments, school fees, or car expenses. Additional caps apply for entertainment (up to $2,650) and certain other benefits. The organisation must be a registered charity or a public benevolent institution.
This arrangement reduces your taxable income, so you pay less income tax and Medicare levy. However, it does not change your gross salary – the figure your employer pays you before any deductions. Your employer may also charge a small administration fee, but the net benefit is usually a higher take-home pay for the same gross salary.
How Does This Affect the Comparison to the Full-Time Average?
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 is the ‘line’ on this site. When you enter your salary, the tool compares your gross annual salary to this figure.
Because salary packaging does not alter your gross salary, your position on the line is based on your pre-packaging income. For example, if your gross salary is $95,000, you are below the average regardless of how much you package. The packaging simply means you keep more of that $95,000 after tax.
It is important to note that the ABS average covers all full-time employees across all industries, not just the non-profit sector. The median full-time salary is lower, at about $90,532 (ABS Employee Earnings, August 2025). Many non-profit roles pay below the average, but salary packaging can make them more attractive by boosting net income.
What Do the Official Sources Say?
The ABS does not publish a separate average for non-profit employees. The most relevant public figure is the national full-time average from Average Weekly Earnings. Fair Work sets the national minimum wage at $26.44 per hour from 1 July 2026, which equates to $52,255 per year on a 38-hour week. Award minimums rose by 4.75% from that date. These are the floors; salary packaging does not change them.
If you are covered by an award or enterprise agreement, your minimum pay is set by that instrument. Salary packaging can be offered on top, but it cannot reduce your base pay below the award rate.
Practical Tips for Using This Site
When you place a salary on the line, enter your gross annual salary as shown on your contract or payslip. Do not subtract the packaged amount. The site will calculate your weekly and hourly rate (based on a 38-hour week) and show the distance from the full-time average. You can then see where you stand.
For a deeper understanding of how different industries compare, visit the industry medians page. The non-profit sector is not separately listed, but you can see averages for health care, social assistance, and other related fields.
State and Territory Differences
Full-time averages vary by state. For instance, the Australian Capital Territory has the highest average at about $119,090, while Tasmania’s is about $96,008. If you work in a non-profit in the ACT, your gross salary may be closer to the national average than if you work in Tasmania, even before packaging. Check the states and territories page for your location.
Tax Implications
Salary packaging 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; and 45% above $190,000. The Medicare levy of 2% applies to most taxpayers. By packaging $15,900, someone earning $80,000 could reduce their taxable income to $64,100, saving about $4,770 in tax (30% bracket) plus Medicare. This does not change their gross salary or their comparison to the average.
Summary
Non-profit salary packaging is a valuable tax concession, but it does not affect your gross salary. When comparing your pay to the national full-time average of $108,352, use your pre-packaging salary. The site’s chart will show your position relative to that line. For more details on how the figures are set, see About this site.