Average line

HomeGuidesSalary packaging

Salary Packaging Companies: How They Affect Your Take-Home Pay Against the National Average

Salary packaging companies do not publish a single salary figure; their value depends on the employee's base salary and chosen benefits. The national full-time average is $108,352 per year.

This sits on the Australian full-time average.

Week, hour, and a tax sketch

$2,084 a week · $54.83 an hour if spread over 38 hours

About $83,159 after resident income tax and a 2% Medicare levy.

2026–27 resident rates and a 2% Medicare levy. Not a tax assessment.Open the full line

Introduction

Salary packaging companies are organisations that help employees rearrange their pay to include non-cash benefits, often reducing taxable income and increasing take-home pay. This guide explains how these companies work and what they mean for your salary compared to the national full-time average. The reference point is the ABS Average Weekly Earnings, May 2026, which gives a full-time adult ordinary-time average of $2,083.70 per week, or about $108,352 per year. This is the line on this site.

How Salary Packaging Works

Salary packaging, also known as salary sacrificing, lets you swap part of your pre-tax salary for benefits like a car, laptop, or extra superannuation contributions. The benefit is paid from your gross salary before income tax is calculated, so your taxable income falls. Salary packaging companies manage the administration, including compliance with fringe benefits tax (FBT) rules.

For example, if your base salary is $108,352 and you package a car worth $15,000 per year, your taxable income becomes $93,352. Under the 2026–27 resident tax rates, the tax on $108,352 is about $24,467 (including Medicare levy), while on $93,352 it is about $19,967 – a saving of $4,500. However, some benefits attract FBT, which the employer may pass on, so the net saving can be lower.

Take-Home Pay Sketch Using the National Average

Let us sketch the take-home pay for someone on the national full-time average of $108,352, with and without salary packaging. Without packaging, the weekly gross is $2,083.70. After tax (using 2026–27 rates) and Medicare levy, the weekly take-home is roughly $1,520. This is based on the tax brackets: nil on the first $18,200, 15% to $45,000, 30% to $135,000, then higher rates. The Medicare levy adds 2%.

With a typical salary packaging arrangement – say a novated lease costing $15,000 per year – the taxable income drops to $93,352. The weekly take-home then rises to about $1,610, an extra $90 per week. This is a simplified example; actual savings depend on the benefit type, FBT, and your employer’s policy.

Compare this to the national full-time median of about $90,532 (ABS Employee Earnings, August 2025). Someone on the median who packages the same $15,000 benefit would reduce taxable income to $75,532, saving about $4,500 in tax as well, but their take-home is lower overall. The minimum wage from 1 July 2026 is $26.44 per hour, $1,004.90 per week, or about $52,255 per year – salary packaging is less common at this level because the tax savings are smaller.

State Comparisons

State full-time averages vary, which affects the benefit of salary packaging. For instance, the Australian Capital Territory average is about $119,090, while Tasmania is about $96,008. Someone in the ACT on the state average who packages $15,000 would save tax at the 30% rate (since $119,090 minus $15,000 is $104,090, still in the 30% bracket). In Tasmania, the state average is below the national average, so the tax saving is similar but the base is lower. See the States and territories page for more detail.

Conclusion

Salary packaging companies offer a way to increase take-home pay by reducing taxable income, particularly for those on or above the national full-time average. The exact benefit depends on your salary, the benefits chosen, and FBT rules. Always check with a tax professional and use the Place a salary on the line tool to see how your pay compares. For more on how these figures are set, visit How the figures are set.

Questions

What do salary packaging companies do?

Salary packaging companies help employees structure their remuneration to include non-cash benefits such as cars, laptops, or additional superannuation. These benefits are paid from pre-tax salary, reducing taxable income and increasing take-home pay. The value depends on your base salary and the benefits you choose. For example, a novated lease on a car is a common arrangement facilitated by these companies.

How does salary packaging affect my take-home pay compared to the national average?

If your base salary is around the national full-time average of $108,352, salary packaging can reduce your taxable income. For instance, packaging a car worth $15,000 per year could lower your taxable income to $93,352. Under the 2026–27 tax rates, you would save about $4,500 in tax (30% of $15,000), plus the Medicare levy. Your take-home pay increases by that amount, though you must account for any fringe benefits tax (FBT) that may apply. The exact effect depends on your salary and the benefits you select.

Are salary packaging companies worth using?

For many employees, especially those on higher incomes, salary packaging can provide significant tax savings. However, it is important to consider FBT and the cost of the benefit. For someone on the national average, packaging a car may save around $4,500 in tax annually, but you must weigh the cost of the car lease. Always consult a tax professional to determine if salary packaging suits your circumstances. The national full-time median is about $90,532, so packaging may be more beneficial for those above that level.

Related guides