What is a salary sacrifice car lease?
A salary sacrifice car lease is an arrangement where your employer deducts the cost of a car lease from your pre-tax salary. You agree to forgo part of your cash wages in exchange for the use of a vehicle. This reduces your taxable income, so you pay less income tax and Medicare levy. The lease payments come out of your gross salary before tax, meaning your cash salary (the amount you actually receive) is lower than your total employment package.
How it affects your salary comparison
When you place a salary on the line, the tool asks for your yearly salary before tax. That figure should be your cash salary – the amount you earn after any salary sacrifice deductions. Because a salary sacrifice car lease reduces your cash salary, your entry will be lower than your total remuneration. This can move your pay below the national full-time average, even if your total package is above it.
The national average line
The site’s benchmark is the ABS Average Weekly Earnings for full-time adult ordinary-time earnings, May 2026. That figure is $2,083.70 per week, or about $108,352 per year (multiplied by 52). This average is based on cash earnings before tax, not including fringe benefits like a car lease. So if your cash salary after sacrifice is less than $108,352, you sit below the line. If it’s more, you sit above.
State variations
Full-time averages vary by state. For example, the Australian Capital Territory average is about $119,090, while Tasmania is about $96,008. A salary sacrifice car lease might push your cash salary below your state’s average, depending on your total package. You can compare your pay across regions on the states and territories page.
Tax considerations
Salary sacrifice reduces your taxable income, which can lower the tax you pay under the 2026–27 resident tax rates: nil to $18,200; 15% to $45,000; 30% to $135,000; 37% to $190,000; 45% above that, plus the 2% Medicare levy. However, the ATO may apply fringe benefits tax (FBT) to the car benefit, which your employer often passes on as a reduction in your salary package. This can further reduce your cash salary. The net effect is that your take-home pay may be higher than if you paid for the car with after-tax dollars, but your cash salary is lower.
What moves your pay above or below the average
Your cash salary after a salary sacrifice car lease is the key figure. If your total package (cash plus car benefit) is well above the average, your cash salary might still be below it. For example, if your total package is $120,000 and you sacrifice $15,000 for the lease, your cash salary is $105,000 – below the national average of $108,352. To be above the average, your cash salary must exceed $108,352, which means your total package needs to be significantly higher.
Medians and minimum wage
The full-time median cash salary is about $90,532 (ABS Employee Earnings, August 2025), and the all-employees median is about $74,100. A salary sacrifice car lease can push your cash salary below these medians if your total package is modest. 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. Even with a small salary sacrifice, your cash salary would likely be above the minimum wage, but the comparison to the average or median depends on your total package.
Practical steps
To see where your pay sits, enter your cash salary (after any salary sacrifice) into the tool. The site will show your weekly and hourly amounts on a 38-hour week, and the distance from the full-time average. If you are considering a salary sacrifice car lease, remember that it reduces your cash salary, which may lower your position relative to the average. For more guidance on how the figures are set, see About this site.
Conclusion
A salary sacrifice car lease is a common way to reduce tax, but it directly affects your cash salary and therefore your comparison to the national average. Your cash salary is what matters for the line. If you want to be above the average, you need a high total package so that even after the sacrifice your cash salary exceeds $108,352. Otherwise, you will sit below the line, even if your overall remuneration is competitive.