Salary Sacrifice Car Companies and Your Pay
Salary sacrifice car companies offer a way to reduce your taxable income by packaging a vehicle through your employer. Instead of paying for a car with after-tax dollars, you agree to a lower gross salary in exchange for the car and its running costs. This arrangement is common in Australia, especially through novated leases. But how does it affect where your pay sits against the national full-time average?
The National Full-Time Average
The benchmark on this site is the ABS Average Weekly Earnings for full-time adult ordinary-time employees, May 2026: $2,083.70 per week, or about $108,352 per year (multiplied by 52). This figure represents gross earnings before any salary sacrifice deductions. It includes wages, salaries, and other ordinary-time payments, but not overtime or bonuses. The ABS collects this data from employers, so it reflects the total cost of employment before any voluntary salary sacrifice arrangements.
When you enter your salary on this site, you should use your gross annual salary before any salary sacrifice. That way, the comparison to the national average is like-for-like. If you enter your salary after sacrifice, the site will show a lower figure, but that would not be comparable to the ABS average.
How Salary Sacrifice Changes Your Effective Pay
Let's say your gross salary is $120,000. You arrange a salary sacrifice car through a company, costing $15,000 per year. Your taxable income becomes $105,000. Your take-home pay (after tax and Medicare) will be lower than if you had not sacrificed, but you receive the car. However, your gross salary as reported by your employer is still $120,000. The ABS average of $108,352 is based on gross earnings, so your pay sits above the line. But your disposable income is reduced.
It's important to note that the national full-time average is a gross figure. The site also shows medians: the full-time median is about $90,532, and the all-employees median is about $74,100 (ABS Employee Earnings, August 2025). These are also gross figures. Salary sacrifice does not change these medians; it only affects your personal tax position.
State Averages and Salary Sacrifice
State full-time averages vary. For example, New South Wales averages about $109,658, while Tasmania averages about $96,008. If you work in a higher-paying state like the Australian Capital Territory ($119,090) or Western Australia ($115,825), your gross salary might be above the national line. Salary sacrifice can further reduce your taxable income, but the comparison on this site remains based on gross pay. You can explore state differences on the States and territories page.
Minimum Wage and Award Rates
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. Award minimums rose by 4.75% from that date. Salary sacrifice is generally not available to employees on the minimum wage, as it would reduce their pay below the minimum. However, some award-covered employees may access salary sacrifice if their base rate remains above the award minimum after the sacrifice. Fair Work sets the rules.
Using This Site with Salary Sacrifice
To see where your pay sits, enter your gross annual salary before any sacrifice. The site will show your weekly and hourly equivalents on a 38-hour week, and the distance from the full-time average. For example, if your gross salary is $110,000, you are about $1,648 above the line. If you sacrifice $10,000, your taxable income is $100,000, but the site still shows $110,000 because that is your gross pay. The line is based on gross earnings, so your position relative to the average does not change.
If you want to compare your after-sacrifice income to the average, you would need to adjust your entry. But the site is designed for gross salaries. For more details on how the figures are set, see How the figures are set.
Tax Considerations
Salary sacrifice reduces your taxable income, which can lower your marginal tax rate. For 2026–27, the tax brackets are: nil up to $18,200; 15% on the next $26,800; 30% on the next $90,000; 37% on the next $55,000; and 45% above $190,000. Plus a 2% Medicare levy. If your gross salary is $120,000 and you sacrifice $15,000, your taxable income drops to $105,000, moving you from the 37% bracket to the 30% bracket for that portion. However, the car benefit may attract FBT, which your employer may pass on as a higher sacrifice amount. The ATO provides guidelines on novated leases and FBT.
Conclusion
Salary sacrifice car companies offer a way to reduce tax while getting a vehicle. But when comparing your pay to the national full-time average, use your gross salary. The line of $108,352 is a gross figure, and your position relative to it remains the same regardless of sacrifice. For a deeper look at how your pay compares across industries or occupations, visit Industry medians or Job medians. Remember that the ABS publishes Average Weekly Earnings twice a year (May and November), so the line updates accordingly.