Salary packaging meals and entertainment and the national average
Salary packaging meals and entertainment is a popular way for eligible employees to reduce their taxable income by using pre-tax dollars to pay for certain meals and entertainment expenses. But how does this affect where your pay sits against the national full-time average? The short answer is that the comparison is based on your gross salary before any packaging, so packaging itself does not move the number you enter on this site. However, understanding the interplay between packaging, tax, and the average can help you see the full picture.
What the national average represents
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 figure is the average gross earnings of full-time employees before any deductions, including salary sacrifice arrangements. The ABS publishes this data twice a year, in May and November. For context, the full-time median is about $90,532, and the all-employees median is about $74,100 (ABS Employee Earnings, August 2025). 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).
How salary packaging meals and entertainment works
Under ATO rules, salary packaging meals and entertainment is typically available to employees of certain employers, such as public hospitals, charities, and other not-for-profit organisations. The packaged amount is deducted from your gross salary before income tax is calculated, reducing your taxable income. For example, if your gross salary is $108,352 and you package $10,000 for meals and entertainment, your taxable income becomes $98,352. You then pay tax on the lower amount, potentially saving hundreds or thousands of dollars depending on your marginal tax rate.
The ATO caps the FBT-exempt amount for meal entertainment and certain other benefits. While the exact cap can vary by employer type and arrangement, the key point is that the packaged amount is not included in the gross salary figure you enter on this site. The site asks for your yearly salary before tax, which is the total remuneration your employer pays you before any salary sacrifice deductions. So if your employment contract states a total package of $108,352, that is the number you should enter, regardless of how much you sacrifice.
Where your pay sits on the line
To see where your pay stands against the national average, place your salary on the line. The tool will show your weekly and hourly equivalent (based on a 38-hour week) and the distance from the $108,352 average. If your gross salary is above that figure, you are above the line; if below, you are below. Salary packaging does not change this comparison because the line is drawn using gross earnings.
However, packaging can affect your after-tax income significantly. For someone on the average gross salary, packaging $10,000 could save up to $3,200 in tax (at the 30% marginal rate plus 2% Medicare levy). That effectively boosts your take-home pay, even though your gross position on the line remains unchanged.
State and territory differences
The national average masks variation across states. For instance, the Australian Capital Territory has the highest full-time average at about $119,090, while Tasmania has the lowest at about $96,008. Western Australia ($115,825) and New South Wales ($109,658) also sit above the national figure. If you are considering salary packaging, your state’s average can give you a local benchmark. See the state and territory averages for more detail.
Medians and minimum wage context
While the average is $108,352, the median full-time salary is lower at about $90,532, meaning half of full-time workers earn less than that. The all-employees median (including part-time and casual) is about $74,100. The national minimum wage is about $52,255 per year. Salary packaging is most beneficial for those in higher tax brackets, but even workers on the median can benefit if they are eligible. The ATO’s tax rates for 2026–27 start at nil up to $18,200, then 15% up to $45,000, 30% up to $135,000, 37% up to $190,000, and 45% above that, plus the 2% Medicare levy.
How the figures are set
The national average is calculated by the ABS using the Average Weekly Earnings survey, which collects gross earnings data from employers. The median figures come from the ABS Employee Earnings and Hours survey. The minimum wage is set by Fair Work. Learn more about how the figures are set.
Key takeaway
Salary packaging meals and entertainment is a valuable tax-saving tool, but it does not change your gross salary or your position relative to the national average. To see where you stand, enter your total pre-tax salary on this site. The line will show you how your pay compares, and you can then consider how packaging might improve your after-tax position.
For more guidance on salary packaging and other pay topics, visit the Guides section.