What Can I Salary Sacrifice? Understanding Your Pay Against the National Average
Salary sacrifice is a common way to reduce your taxable income by swapping part of your pre-tax salary for benefits. But how does it affect where your pay sits compared to the national full-time average? This article explains what you can salary sacrifice, how it works, and what it means for the line on this site.
How Salary Sacrifice Works
Under a salary sacrifice arrangement, you and your employer agree that you will receive a lower gross salary in exchange for certain benefits. The benefits are paid from your pre-tax income, so your taxable income decreases. Your employer may also pay fringe benefits tax (FBT) on some items. The ATO sets the rules, and not all employers offer salary sacrifice.
Importantly, the gross salary you enter on this site is the amount before any sacrifice. For example, if your employment contract says $100,000 and you sacrifice $10,000 for a car, your gross salary for the line is still $100,000. The site compares that gross figure to the national full-time average.
Common Salary Sacrifice Items
What can you salary sacrifice? The ATO allows a range of benefits, but some are more common than others:
- Additional superannuation contributions: These are often the most tax-effective, as they are taxed at only 15% up to the concessional cap.
- Novated lease on a car: A popular option that bundles car costs (lease, fuel, maintenance, insurance) into one pre-tax deduction.
- Electronic devices: Laptops, tablets, and phones if they are primarily work-related.
- Parking: If your employer provides car parking, you may be able to sacrifice that cost.
- Health insurance: Some employers offer salary sacrifice for health insurance premiums, but FBT may apply.
Not everything can be salary sacrificed. The ATO prohibits certain items, and your employer decides which benefits to offer. Always check with your payroll department.
How It Affects Your Position on the Pay Line
The line on this site is based on the ABS Average Weekly Earnings for full-time adults, which was $2,083.70 per week in May 2026, or about $108,352 per year. When you place a salary on the line, you see how your gross salary compares to that average. Salary sacrifice does not change that gross figure, so your position on the line remains the same.
However, salary sacrifice does affect your take-home pay. Because you are sacrificing part of your salary for benefits, your net pay (after tax and the sacrifice) will be lower than what you might expect from that gross salary. For example, someone earning $108,352 who sacrifices $10,000 into super will have a taxable income of $98,352, reducing their tax bill. But their gross salary for the line is still $108,352.
Tax Implications
Salary sacrifice reduces your taxable income, which can move you into a lower tax bracket. The 2026–27 resident tax rates are:
- Nil up to $18,200
- 15% from $18,201 to $45,000
- 30% from $45,001 to $135,000
- 37% from $135,001 to $190,000
- 45% above $190,000
Plus the Medicare levy of 2% (with reductions for low incomes).
If your gross salary is $108,352, you are in the 30% bracket. Sacrificing $10,000 into super reduces your taxable income to $98,352, still in the 30% bracket, but you save $3,000 in tax (30% of $10,000) plus the Medicare levy. The super contribution is taxed at 15%, so you pay $1,500 instead of $3,000 plus levy. That's a net benefit.
But remember: the line on this site does not account for salary sacrifice. It compares gross salaries. So if you sacrifice a large amount, your net pay may be lower than someone earning the same gross without sacrifice. That doesn't mean your position on the line is wrong; it just means your spending power differs.
Comparing to the National Average
The national full-time average is about $108,352 per year. The full-time median 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, or about $52,255 per year on a 38-hour week.
If your gross salary is above $108,352, you are above the average line. If it is below, you are below. Salary sacrifice does not change that comparison. However, if you are considering salary sacrifice, it is worth knowing that the average and median figures are based on gross earnings before any sacrifice. The ABS collects data on ordinary-time earnings, which may or may not include salary sacrifice amounts depending on how employers report them. Generally, salary sacrifice benefits are not counted as earnings in the ABS surveys, so the averages reflect cash wages.
State Differences
State full-time averages vary. For example, the Australian Capital Territory has the highest at about $119,090, while Tasmania has the lowest at about $96,008. If you live in a state with a higher average, your gross salary might be below that state's average even if it is above the national average. You can see state figures on the States and territories page. Salary sacrifice rules are federal, so the same benefits apply regardless of where you live.
What This Means for You
Salary sacrifice is a tool to manage your tax and benefits, but it does not change the gross salary that this site uses to compare against the national average. If you want to see where your pay sits, enter your gross salary (before any sacrifice) into the tool. The line will show you how far above or below the full-time average you are. For a deeper understanding of how the figures are set, see How the figures are set.
Remember, salary sacrifice can be a smart way to boost super or get a car, but it reduces your take-home pay. Always consider your cash flow needs and consult a tax professional if unsure.