What Can You Salary Sacrifice in Australia?
Salary sacrifice is a common way to structure your pay to get more value from your pre-tax income. Instead of receiving your full salary in cash, you agree with your employer to put part of it towards certain benefits. The amount you sacrifice is taken out before tax, so you pay less income tax. But not everything can be salary sacrificed, and the rules come from the ATO and sometimes from your award or agreement.
Common Items You Can Salary Sacrifice
The most popular salary sacrifice item is additional superannuation. You can ask your employer to put extra money into your super fund from your pre-tax salary. This is often called salary sacrifice super. The compulsory super guarantee rate is set by law, but you can add more. The ATO caps how much you can contribute each year (the concessional contributions cap), so check the current limit.
Another common benefit is a car through a novated lease. Your employer leases a car on your behalf, and the lease payments come from your pre-tax salary. This can include running costs like fuel, insurance, and maintenance. The ATO treats this as a fringe benefit, but if you use the car partly for work, the FBT may be reduced.
Electronic devices such as laptops, tablets, and phones can be salary sacrificed if they are primarily for work use. The ATO allows this under the otherwise deductible rule. Similarly, work-related expenses like professional memberships, subscriptions, and tools can be sacrificed.
Parking at or near work can be salary sacrificed, but there are FBT implications if the parking is not on your employer’s premises. Childcare is generally not allowed as a salary sacrifice item because it is a personal expense.
What Cannot Be Salary Sacrificed
The ATO does not allow salary sacrifice for items that are mainly for personal use, such as rent, mortgage payments, school fees, holidays, or groceries. Some employers offer salary packaging for novated leases on cars, but the rules are strict. Entertainment and gym memberships are usually not allowed unless they are part of a specific fringe benefit arrangement.
Your award or enterprise agreement may also limit what you can sacrifice. For example, some awards require that you receive a minimum amount of cash wages. Fair Work sets the national minimum wage and award minimums, and you cannot sacrifice below those minimums. The current national minimum wage from 1 July 2026 is $26.44 an hour, $1,004.90 a week, or about $52,255 a year on 38 hours.
How Salary Sacrifice Affects Your Pay Compared to the Average
When you use the tool on this site, you enter your yearly salary before tax. That is the gross figure agreed in your employment contract, before any salary sacrifice deductions. The site then shows your weekly and hourly pay on a 38-hour week, and how far you are from the national full-time average.
The national full-time adult ordinary-time average is $2,083.70 a week, or about $108,352 a year (ABS Average Weekly Earnings, May 2026). This is the line on the chart. Your gross salary is compared directly to that figure.
If you salary sacrifice $10,000 a year into super, your taxable income drops to $98,352, but your gross salary remains $108,352. So your position on the line is unchanged. However, your take-home pay will be lower because you have less cash in hand. The benefit is that your super balance grows faster, and you pay less tax overall.
For example, a full-time worker earning $108,352 and sacrificing $10,000 into super would have a taxable income of $98,352. Under the 2026–27 tax rates, they pay 30% on income between $45,000 and $135,000, plus the Medicare levy of 2%. The salary sacrifice reduces their tax bill, but the comparison to the average is still based on the original $108,352.
Salary Sacrifice and the Minimum Wage
You cannot salary sacrifice below the national minimum wage or the relevant award minimum. Fair Work sets these minimums. If your gross salary is close to the minimum, salary sacrifice may not be possible because you must receive at least the minimum cash wage. The current award minimums rose by 4.75% from 1 July 2026.
State and Territory Averages
The full-time average varies across Australia. For instance, the Australian Capital Territory has the highest average at about $119,090, while Tasmania has the lowest at about $96,008. If you salary sacrifice, your gross salary is still compared to the state average for your location. The site uses the national average for the line, but you can see state comparisons on the States and territories page.
How the Figures Are Set
The national full-time average comes from the ABS Average Weekly Earnings survey, published twice a year for May and November. The median full-time salary is $90,532 (ABS Employee Earnings, August 2025). The all-employees median is $74,100. These are different from the average. Salary sacrifice does not change these published figures.
For more detail on how the site calculates the line and uses the data, see How the figures are set.
Practical Considerations
Before you start salary sacrificing, check with your employer whether they offer a salary packaging program. Some employers only allow certain items. Also, consider the FBT implications. The ATO requires that you enter into a formal agreement before the work is done. You cannot retrospectively sacrifice salary.
If you are comparing your pay to the national average, remember that the average includes all full-time adult workers, including those who may salary sacrifice. The average is based on gross earnings before any deductions, so your comparison is fair.
Summary
Salary sacrifice lets you swap some of your pre-tax salary for benefits like extra super, a car, or work equipment. The ATO sets the rules, and your award may limit what you can do. Your gross salary remains the figure used to compare against the national full-time average of $108,352. Salary sacrifice can reduce your tax but does not move your position on the line. For more guides on pay and benefits, visit the Guides section.