What is salary sacrifice for a home loan?
Salary sacrifice for a home loan is an arrangement where you agree to forgo part of your pre-tax salary in exchange for your employer making payments towards your mortgage or providing housing-related benefits. This is common in some industries, particularly for employees of not-for-profit organisations or certain government roles. The sacrificed amount is not included in your taxable income, so you pay less income tax. The benefit is that your home loan repayments are effectively made with pre-tax dollars, increasing your disposable income.
How does it affect your gross salary?
The national full-time average line on this site is based on gross ordinary-time earnings as measured by the ABS Average Weekly Earnings, May 2026. That figure is $2,083.70 per week, or about $108,352 per year. The ABS collects earnings data before any deductions, including salary sacrifice. So when you enter your yearly salary before tax into the tool, it reflects your full gross salary, not the amount after sacrifice. Your position on the line is therefore determined by your pre-sacrifice earnings, not your taxable income.
Where does the average line sit?
The national full-time average of $108,352 is the benchmark. For context, the full-time median (ABS Employee earnings, August 2025) is about $90,532, and the all-employees median is about $74,100. 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. State full-time averages vary: New South Wales $109,658, Victoria $106,137, Queensland $106,064, South Australia $102,450, Western Australia $115,825, Tasmania $96,008, Northern Territory $103,173, and the Australian Capital Territory $119,090. Men's full-time average is about $113,412; women's about $100,594.
How salary sacrifice can move your effective pay
While your gross salary remains unchanged, salary sacrifice reduces your taxable income. For example, if you earn $108,352 (the average) and sacrifice $10,000 into your home loan, your taxable income becomes $98,352. Using 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 2% Medicare levy), you would save roughly $3,000 in tax. Your take-home pay increases, but your gross salary is still at the average line. This means your net pay could be above what someone with the same gross salary but no sacrifice receives, but the line itself does not move.
Considerations for the line
The line is a gross salary benchmark. If you are considering salary sacrifice, your gross salary might be above or below the average. The sacrifice can help you afford a home loan even if your gross is below average, by reducing tax and freeing up cash. However, the line only compares gross earnings. To see where your gross salary sits, use the Place a salary on the line tool. For more on how the figures are sourced, see How the figures are set.
What would move your pay above or below the average?
Your gross salary is the key factor. If you receive a pay rise, change jobs, or negotiate a higher base, your position on the line changes. Salary sacrifice does not affect that gross figure. However, if your employer offers salary sacrifice as part of a total remuneration package, your gross salary might be lower than the package value. Always check whether the salary quoted is before or after sacrifice. The ABS average includes all ordinary-time earnings, so it reflects the gross amounts employers report.
Tax implications and the line
The line shows pre-tax salary. Salary sacrifice reduces your tax, but the line remains the same. If you are comparing your pay to the average, use your gross salary. The tax savings from sacrifice are a separate benefit. For 2026–27, the tax-free threshold is $18,200, then 15% up to $45,000, 30% up to $135,000, 37% up to $190,000, and 45% above. Medicare levy adds 2%. Salary sacrifice can lower your marginal rate, but it does not change the gross figure used for the line.
Summary
Salary sacrifice for a home loan is a useful way to reduce tax and improve housing affordability. But it does not change your gross salary, so your position relative to the national full-time average of $108,352 is based on your pre-sacrifice earnings. The line is a gross benchmark, and the tool accepts your yearly salary before tax. Use the Place a salary on the line tool to see where you stand, and refer to How the figures are set for details on the sources.