Understanding Novated Lease Salary Packaging
A novated lease is a three-way agreement between you, your employer, and a finance company. Your employer deducts the lease payments and running costs from your pre-tax salary, reducing your taxable income. This is a form of salary packaging that can lower the amount of tax you pay, but it also reduces the gross salary reported to the ATO. The tool on this site asks for your yearly salary before tax — that is, your base salary before any packaging. Enter that figure to see where your pay sits against the national full-time average.
How the Site Compares Your Pay
The site uses the ABS Average Weekly Earnings for May 2026: $2,083.70 per week, or about $108,352 per year on a 38-hour week. This is the national full-time adult ordinary-time average. Your base salary is compared to this line, and the tool also shows your weekly and hourly equivalents. For example, if your base salary is $120,000, you are above the average. If it is $90,000, you are below. The site also displays the full-time median of about $90,532 and the all-employees median of about $74,100 from the ABS Employee Earnings survey (August 2025). The national minimum wage from Fair Work (1 July 2026) is $26.44 per hour, $1,004.90 per week, or about $52,255 per year on 38 hours.
What Novated Leasing Means for Your Figures
When you salary package a car, your employer reduces your gross salary by the packaged amount. Your taxable income becomes lower, but you still receive the benefit of the car. The ATO applies Fringe Benefits Tax (FBT) to most novated leases, though some electric vehicles may be exempt. The net effect is that your take-home pay may be higher than if you paid for the car from after-tax income, but your reported salary is lower. This means that if you enter your packaged salary (the reduced amount) into the tool, it will show a lower figure than your base salary. To get an accurate comparison to the national average, always enter your base salary before packaging.
State and Territory Averages
The site also provides state and territory full-time averages from the same ABS release. For example, New South Wales averages 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, the Northern Territory about $103,173, and the Australian Capital Territory about $119,090. If you live in a state with a higher average, your base salary may need to be higher to match the local market. Salary packaging does not change your location, so the state comparison remains valid for your base salary.
Tax Brackets and the Medicare Levy
For the 2026–27 income year, the ATO 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 is 2% of taxable income, with reductions for low-income earners. Salary packaging reduces your taxable income, potentially moving you into a lower bracket. For example, if your base salary is $120,000 and you package $15,000, your taxable income becomes $105,000, saving you tax at the 30% rate. However, FBT may apply, so the actual saving depends on the car's value and the FBT rate.
Using the Site with Salary Packaging
To get the most out of this site, place your base salary on the line and see how it compares to the national average. If you are considering a novated lease, you can also estimate the effect by reducing your salary by the packaged amount and re-entering it, but remember that the tool's comparison is always to the full-time average of $108,352. For more detailed guidance on salary packaging and how it interacts with awards and enterprise agreements, see our guides on remuneration structures.
Key Takeaways
- Novated lease salary packaging reduces your taxable income but not your base salary for comparison purposes.
- The national full-time average of $108,352 is based on gross ordinary-time earnings before any packaging.
- Always enter your base salary (before packaging) into the tool to see an accurate distance from the average.
- State averages, medians, and the minimum wage are unaffected by your packaging choices.
- The ATO's tax brackets and Medicare levy apply to your taxable income after packaging.
For more on how the figures are set, see how the figures are set. This site uses the most recent ABS, Fair Work, and ATO data to give you a clear picture of where your pay stands.