Salary sacrifice car calculator Australia: What it means for your pay
A salary sacrifice car arrangement, often called a novated lease, lets you use pre-tax income to pay for a car. This reduces your taxable salary, which changes how your pay compares to the national full-time average. Understanding that shift is key when you place a salary on the line here.
How salary sacrifice works
Under a salary sacrifice agreement, your employer deducts the car lease and running costs from your gross salary before tax is calculated. The amount sacrificed is not included in your taxable income. Your take-home pay is lower, but you get the use of the car. The total cost to your employer is roughly the same, but your tax bill shrinks.
The effect on your reported salary
On this site, you enter your yearly salary before tax. If you salary sacrifice a car, that figure is your taxable salary after the sacrifice. For example, if your total package is $120,000 and you sacrifice $15,000 for a car, you enter $105,000. That is below the national full-time average of $108,352 (ABS Average Weekly Earnings, May 2026, × 52). Your pay would appear below the line, even though your total remuneration is above it.
Comparing to medians and the minimum wage
The full-time median is about $90,532 (ABS Employee earnings, August 2025). The all-employees median is about $74,100. The national minimum wage from 1 July 2026 is $26.44 an hour, $1004.9 a week, or about $52,255 a year on 38 hours. If your salary after sacrifice is above the median, you are still in the top half of full-time earners. If it drops below the median, your position changes. The site also shows your weekly and hourly rate on a 38-hour week, so you can see where you sit against these benchmarks.
State averages and your location
Your location matters. The full-time average varies by state: New South Wales 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; Northern Territory about $103,173; Australian Capital Territory about $119,090. If you live in a state with a higher average, a salary sacrifice might push you further below that state's line. For more detail, see the states and territories page.
Tax considerations
Salary sacrifice reduces your taxable income, which can lower the tax you pay. For 2026–27, the ATO tax brackets are: nil to $18,200; 15% to $45,000; 30% to $135,000; 37% to $190,000; 45% above that. The Medicare levy is 2% before reductions. If your sacrifice drops you into a lower bracket, you save the difference. However, fringe benefits tax (FBT) may apply if the car is available for personal use. Many novated leases are structured to minimise FBT by using the statutory formula or operating cost method.
What moves your pay above or below the average
The key factor is the amount you sacrifice. A larger sacrifice moves your taxable salary further below the average. A smaller sacrifice keeps you closer. Your total package (salary plus car value) may be above the average, but the site only sees the taxable part. Also, if your employer contributes to the car costs, that can affect the calculation. The guides section has more on how to assess your total remuneration.
Using the calculator on this site
The on-site tool accepts a yearly salary before tax. It shows a weekly and hourly rate on a 38-hour week, plus the distance from the full-time average. To get an accurate comparison, enter your taxable salary after any salary sacrifice. Do not include the car's value. The chart on the page will show where you sit relative to the line.
How the figures are set
The average is from the ABS Average Weekly Earnings survey, conducted twice a year (May and November). The medians are from the ABS Employee Earnings and Hours survey, most recently August 2025. The minimum wage is set by Fair Work, effective 1 July 2026. Award minimums rose 4.75% that year. For more on methodology, see how the figures are set.
Summary
Salary sacrificing a car reduces your taxable income, which can make your pay appear lower than the national full-time average. It does not mean you earn less overall; it means the comparison is based on a different figure. Use the site's calculator with your after-sacrifice salary to see where you stand. Consider your state average, the medians, and the minimum wage for a full picture.