Understanding retirement savings salary sacrifice
Retirement savings salary sacrifice is a common arrangement in Australia where an employee agrees to forgo part of their pre-tax salary in exchange for their employer contributing that amount to their superannuation fund. This reduces the employee's assessable income for tax purposes, potentially lowering the amount of tax withheld. However, the gross salary figure—the amount before any sacrifice—remains the same for the purposes of comparing your pay to the national full-time average.
How salary sacrifice interacts with the national full-time average
The national full-time adult ordinary-time average, as published by the ABS in Average Weekly Earnings for May 2026, is $2,083.70 per week, or about $108,352 per year (multiplied by 52). This figure is based on gross earnings before any salary sacrifice arrangements. When you use the Place a salary on the line tool, you enter your yearly salary before tax. That gross figure is what the tool compares to the average. Salary sacrifice does not alter this comparison; it only affects your take-home pay and taxable income.
Factors that move your pay above or below the average
Your underlying gross salary is determined by your job, industry, location, and experience. The ABS also publishes state full-time averages, which vary significantly. For example, the Australian Capital Territory has a full-time average of about $119,090, while Tasmania is about $96,008. If you work in a high-paying state like Western Australia ($115,825) or in an industry with a high median, your gross salary is more likely to sit above the national average. Conversely, roles in lower-paying states or industries may fall below. You can explore these differences on the States and territories page.
Salary sacrifice is more common in certain sectors such as public administration, education, and large corporate firms. However, it does not change the underlying salary level; it simply redirects a portion of it to superannuation. Therefore, the same factors that determine your gross salary—occupation, experience, location—are what move your pay above or below the average.
The role of tax and salary sacrifice
For the 2026–27 financial year, resident tax rates are 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 any reductions. By salary sacrificing, you reduce your taxable income, which may move you into a lower tax bracket. However, your gross salary—the figure used for comparison to the national average—remains unchanged. The tool shows your weekly and hourly amounts based on a 38-hour week, and the distance from the full-time average is calculated from your gross salary.
Minimum wage and salary sacrifice
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. Fair Work sets this minimum, and salary sacrifice cannot reduce your gross salary below this level. If your gross salary is at or near the minimum wage, salary sacrifice may not be practical because it would reduce your take-home pay further. Award minimums rose by 4.75% from 1 July 2026, and any salary sacrifice arrangement must still comply with award conditions.
Using the Average line tool with salary sacrifice
When you enter your yearly salary before tax into the tool, it automatically compares it to the national full-time average. The tool does not ask about salary sacrifice because it only needs your gross figure. If you salary sacrifice, enter the full gross salary (the amount before the sacrifice). The tool will then show you how your gross pay stacks up against the average, the median full-time earnings of about $90,532, and the all-employees median of about $74,100 (ABS Employee earnings, August 2025). Remember that the average is higher than the median, so many full-time workers earn below the average.
Conclusion
Retirement savings salary sacrifice is a tax-effective strategy that does not change your gross salary for comparison purposes. Your pay sits above or below the national full-time average based on your underlying gross earnings, which are influenced by your job, industry, and location. The Average line tool helps you see where you stand, and the figures from the ABS, Fair Work, and the ATO provide the benchmarks. For more detailed guidance on how salaries are set, visit the Guides section.