How Not for Profit Salary Sacrifice Affects Your Pay Position
When you work for a not-for-profit organisation, you may have access to salary sacrifice arrangements that can change the way your pay compares to the national full-time average. This article explains how salary sacrifice works, what the ATO allows, and why your gross salary—the figure you enter into this site—may not tell the full story.
What Is Not for Profit Salary Sacrifice?
Salary sacrifice is an agreement between you and your employer where you give up part of your pre-tax salary in return for benefits. For not-for-profit employees, these benefits often include additional superannuation contributions, a car, or payment of certain expenses such as rent or school fees. The ATO regulates these arrangements, and many not-for-profit employers can offer salary packaging under fringe benefits tax (FBT) exemptions or concessions. This means the benefits you receive are not taxed as income, reducing your overall taxable income.
The Gross Salary Line
This site uses your yearly salary before tax—your gross salary—to place you on the line against the national full-time adult ordinary-time average. That average, from the ABS Average Weekly Earnings for May 2026, is $2083.7 per week, or about $108,352 per year. When you enter your gross salary, the tool shows how far you are above or below that line. It also shows your weekly and hourly pay based on a 38-hour week.
If you have a salary sacrifice arrangement, your gross salary remains the same. You do not reduce the figure you enter. However, because part of your salary is redirected to benefits, your taxable income is lower. This means your take-home pay (after tax) can be higher than someone with the same gross salary who does not salary sacrifice. The tool does not adjust for this—it only compares gross salaries.
State and Award Differences
The national average masks significant variation across states and territories. For example, the Australian Capital Territory has the highest full-time average at about $119,090, while Tasmania has the lowest at about $96,008. Not-for-profit salary sacrifice is available to eligible employees in all states, but the impact on your position relative to the national line depends on where you live. If you work in a state with a high average, your gross salary may need to be higher to stay above the line. Salary sacrifice can help you retain more of that salary, but it does not change the gross comparison.
Award coverage also matters. Many not-for-profit employees are covered by awards such as the Social, Community, Home Care and Disability Services Industry Award (SCHADS). From 1 July 2026, award minimums rose by 4.75%, and the national minimum wage is $26.44 per hour, or about $52,255 per year on 38 hours. If your award rate is below the national average, salary sacrifice can improve your net position, but your gross salary may still sit below the line.
Tax Implications
The ATO sets the tax rates for 2026–27: nil up to $18,200, then 15% to $45,000, 30% to $135,000, 37% to $190,000, and 45% above that. The Medicare levy of 2% applies before reductions. Salary sacrifice reduces your taxable income, potentially moving you into a lower tax bracket. This can increase your net pay without changing your gross salary. However, the tool does not model tax—it only shows gross pay. To understand your net position, you would need to calculate your tax after salary sacrifice.
Caps and Limits
The ATO imposes caps on how much you can salary sacrifice in not-for-profit settings. For example, employees of public benevolent institutions and health promotion charities can package a certain amount for general expenses, plus additional amounts for meal entertainment and accommodation. These caps are not fixed in the on-site notes, so you should check the ATO website for current figures. Exceeding the caps can result in FBT liability for your employer, which may affect your arrangement.
Putting It All Together
When you place a salary on the line, you see how your gross pay compares to the national average. If you work in not-for-profit and use salary sacrifice, remember that your gross salary is the starting point. The line does not reflect your tax savings or the value of benefits. Your actual financial position may be stronger than the gross comparison suggests.
For more detail on how the figures are set, see How the figures are set. The national average, medians, and minimum wage are distinct measures. The full-time median is about $90,532, and the all-employees median is about $74,100 (ABS Employee earnings, August 2025). The men's full-time average is about $113,412, and women's about $100,594. These numbers help you see where your salary sits in the broader picture.
Final Thoughts
Not for profit salary sacrifice is a valuable tool for reducing tax and increasing net pay. But when comparing your salary to the national average, focus on your gross figure. The line is based on gross, and your sacrifice does not change that number. Use the tool to see where you stand, and then consider the additional benefits your employer offers. The combination of gross salary and salary sacrifice can give you a clearer picture of your overall compensation.