What is salary packaging rent?
Salary packaging rent (also called salary sacrificing rent) is an arrangement where your employer pays your rent from your pre-tax salary. This reduces your taxable income, so you pay less tax and your take-home pay effectively increases. It is most common in the not-for-profit, public health, and charitable sectors, where employers can offer fringe benefits under specific ATO rules.
Not all employees can package rent. The ATO limits the amount you can sacrifice, often through a fringe benefits tax (FBT) cap. For the 2026–27 year, the general FBT cap is $9,010, but some employers (such as public hospitals and charities) may have a higher cap of $30,000 or more. Rent packaging is separate from mortgage payments; it only covers rent, not home loan repayments.
How salary packaging interacts with the national average
The national full-time adult ordinary-time average is $2,083.70 a week, or about $108,352 a year, according to the ABS Average Weekly Earnings for May 2026. This figure is your gross salary before tax and before any salary packaging. When you compare your pay to this line, you use your pre-tax salary, not your packaged amount.
Salary packaging rent does not change your gross salary. If your employment contract says you earn $100,000 a year, that is the figure you compare to the average. Packaging reduces the taxable portion, but the line on this site is drawn from the ABS average, which is a pre-tax measure. So packaging does not move your pay above or below the average.
However, packaging can affect your net income. If your gross salary is below the average, packaging may help you keep more of what you earn, but it does not change the fact that your salary sits below the line. Similarly, if your salary is above the average, packaging does not push it higher; it only reduces your tax bill.
What would move your pay above or below the average?
Several factors determine where your salary sits relative to the national average. These include your occupation, industry, state or territory, and whether you work full-time or part-time. The ABS Employee Earnings data (August 2025) shows that the full-time median is about $90,532, and the all-employees median is about $74,100. The national minimum wage from 1 July 2026 is $26.44 an hour, or about $52,255 a year on a 38-hour week.
State full-time averages vary widely. For example, the Australian Capital Territory has the highest average at about $119,090, while Tasmania has the lowest at about $96,008. Western Australia ($115,825) and New South Wales ($109,658) are above the national average, while Victoria ($106,137), Queensland ($106,064), South Australia ($102,450), and the Northern Territory ($103,173) are close to or below it.
If you want to see where your salary lands, you can place a salary on the line to compare it with the national average, state averages, and medians. You can also explore industry medians or job medians to understand typical pay in your field.
The role of tax brackets
Salary packaging rent can shift your taxable income into a lower tax bracket. For 2026–27, the resident 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 adds 2% before any reductions.
If your gross salary is $100,000 and you package $10,000 in rent, your taxable income becomes $90,000. That keeps you in the 30% bracket rather than the 37% bracket (which starts at $135,000). But your gross salary is still $100,000, so your position relative to the national average of $108,352 is unchanged: you are below the average.
Packaging and the line: a common misunderstanding
Some readers think salary packaging can make a lower salary look higher. It does not. The line on this site is based on the ABS Average Weekly Earnings, which is a measure of ordinary-time earnings before tax and before any salary sacrifice arrangements. The ABS collects data from employers about gross wages and salaries, not packaged amounts.
If you are considering a job that offers rent packaging, remember that the advertised salary is the figure to compare. The packaging is a tax-effective benefit that improves your after-tax position, but it does not change the gross figure used for the line. For more detail on how the figures are set, see How the figures are set.
Practical considerations
Salary packaging rent is not available to everyone. It is typically offered by employers that are eligible for FBT concessions, such as public hospitals, charities, and some not-for-profits. Private-sector employees generally cannot package rent unless their employer is in a specific category. The ATO has strict rules about what counts as rent and how much can be sacrificed.
If you are eligible, you should weigh the benefit against other packaging options, such as a car or superannuation. Rent packaging can be particularly valuable if you live in a high-rent area and your salary is close to the national average. It may help you keep more of your income, but it will not move your gross salary above or below the line.
For more guidance on salary packaging and other pay topics, visit the Guides section.