Understanding salary sacrifice in the not-for-profit sector
Salary sacrifice is a common way for employees of not-for-profit (NFP) organisations to increase their take-home pay. Instead of receiving your full salary in cash, you agree to have part of it redirected to pay for benefits such as a car, laptop, superannuation, or even school fees. Because the benefit is provided by an employer that is a public benevolent institution, health promotion charity, or other eligible NFP, the ATO may exempt it from fringe benefits tax (FBT). This means you do not pay income tax on the sacrificed amount, and your employer does not pay FBT. The result is that your net pay can be higher than if you had received the same gross salary without salary sacrifice.
How salary sacrifice affects your take-home pay
When you salary sacrifice, your taxable income decreases. For example, if your gross annual salary is $90,000 and you salary sacrifice $15,000 for a car, your taxable income becomes $75,000. Using the 2026–27 tax rates (nil up to $18,200; 15% from $18,201 to $45,000; 30% from $45,001 to $135,000; plus 2% Medicare levy), the tax on $90,000 is roughly $20,467, while on $75,000 it is about $15,217. That is a saving of $5,250. Your take-home pay increases by that amount, though you have the benefit of the car as well. However, your gross salary of $90,000 is still below the national full-time average of $108,352 (ABS Average Weekly Earnings, May 2026). The site's line is $2,083.70 per week. Many NFP roles pay below this average, but salary sacrifice can make the net pay more competitive.
Comparing your pay to the national average
The national full-time adult ordinary-time average is $108,352 per year. The full-time median is about $90,532, and the all-employees median is about $74,100 (ABS Employee earnings, August 2025). If you work in an NFP and your gross salary is near the median, salary sacrifice can lift your net income closer to the average. For instance, a gross salary of $90,000 with a $15,000 sacrifice gives a taxable income of $75,000, netting about $59,783 after tax and Medicare. Without sacrifice, net on $90,000 is about $69,533. The sacrifice adds $5,250 to net pay, but you also receive the benefit. Still, your gross is below the average. To see where your salary sits on the line, use the Place a salary on the line tool.
State averages vary. For example, the ACT full-time average is $119,090, while Tasmania is $96,008. NFP salaries may differ by state. You can compare your pay to your state's average on the States and territories page.
Tax considerations for NFP employees
The ATO allows certain NFP employers to provide FBT-exempt benefits up to a cap. For public benevolent institutions, the cap is $30,000 per employee per year. Other NFPs may have lower caps. Benefits above the cap are subject to FBT, which your employer may pass on to you. Salary sacrifice cannot reduce your pay below the national minimum wage ($26.44 per hour, $1,004.90 per week, $52,255 per year from 1 July 2026 per Fair Work). Award minimums rose 4.75% from that date. Always check your award or agreement.
Resident tax rates for 2026–27: nil to $18,200; 15% to $45,000; 30% to $135,000; 37% to $190,000; 45% above that. Medicare levy is 2% before reductions. Salary sacrifice reduces your taxable income, so you may fall into a lower bracket. This is especially beneficial if your gross salary is near the threshold.
How the figures are set
The national average is from ABS Average Weekly Earnings, May 2026. Medians are from ABS Employee earnings, August 2025. The minimum wage is from Fair Work, effective 1 July 2026. Tax rates are from the ATO for 2026–27. For more on how these figures are determined, see How the figures are set.
In summary, salary sacrifice for not-for-profit employees can significantly boost take-home pay, but your gross salary may still be below the national full-time average. Use the site's tools to see where your pay lands.