What Is Salary Sacrificing?
Salary sacrificing is a common arrangement in Australia where an employee agrees to give up part of their pre-tax salary in exchange for benefits of a similar cost. The sacrificed amount is deducted from your gross pay before income tax is calculated, reducing your taxable income. Common benefits include additional superannuation contributions (above the compulsory Super Guarantee), a novated lease for a car, or other fringe benefits like laptops or childcare fees.
The Australian Bureau of Statistics (ABS) defines salary sacrifice as "an arrangement where an employee agrees to forgo part of their pre-tax salary in return for benefits" (ABS Average Weekly Earnings methodology, May 2026). This definition is important because it affects how your pay is measured against national averages.
How Salary Sacrificing Affects Your Pay Against the National Average
On this site, the national full-time adult ordinary-time average is $2,083.70 per week, or about $108,352 per year (ABS Average Weekly Earnings, May 2026). This figure represents average gross earnings before any salary sacrifice. If you salary sacrifice, your taxable income will be lower than your total remuneration package, but the average line does not account for that reduction.
For example, if your gross salary is $120,000 per year and you salary sacrifice $15,000 into super, your taxable income becomes $105,000. The site would compare your $105,000 against the $108,352 average, showing you below the line – even though your total package ($120,000) is above it. To get a fair comparison, you would need to consider your total remuneration, not just the amount after sacrifice.
The ABS publishes a separate "Average Weekly Cash Earnings" series that includes salary sacrificed amounts, but the standard average used here is the one most commonly cited in legislation and commercial contracts. The site uses the standard series to maintain consistency with official benchmarks.
Understanding the Full-Time Average and Other Benchmarks
The national full-time average is derived from the ABS Average Weekly Earnings survey, conducted in May and November each year. The latest release (May 2026) shows a 3.7% annual increase to $2,083.70 per week for full-time adult ordinary time earnings. This is the figure used as the "line" on this site.
Other benchmarks include:
- Full-time median: about $90,532 per year (ABS Employee Earnings, August 2025) – the midpoint of all full-time earners.
- All-employees median: about $74,100 per year (ABS Employee Earnings, August 2025) – includes part-time and casual workers.
- National minimum wage: $26.44 per hour, $1,004.90 per week, about $52,255 per year on a 38-hour week (Fair Work, from 1 July 2026).
- Award minimums: rose by 4.75% from 1 July 2026.
State full-time averages also vary, from Tasmania's $96,008 to the ACT's $119,090 (ABS May 2026). You can explore these on the States and territories page.
Salary Sacrificing and Tax
Salary sacrificing reduces your taxable income, which can lower the amount of tax you pay. For the 2026–27 income year, resident tax rates are:
- Nil up to $18,200
- 15% on income from $18,201 to $45,000
- 30% on income from $45,001 to $135,000
- 37% on income from $135,001 to $190,000
- 45% on income above $190,000 Plus the Medicare levy of 2% (with possible reductions for low incomes).
By sacrificing into super, you pay only 15% tax on contributions (up to the concessional cap), which is often lower than your marginal rate. However, the sacrificed amount is still counted for the Super Guarantee (11.5% from 1 July 2026) and may affect your employer's obligations.
Where to See How Your Pay Compares
If you want to see where your salary sits against the national average, you can Place a salary on the line using the tool on this site. Enter your yearly pre-tax salary (before any sacrifice) and the tool will show your weekly and hourly equivalents on a 38-hour week, plus how far you are from the full-time average.
For a deeper look at how different industries and occupations compare, visit Industry medians or Job medians. These pages use the latest ABS data to show typical earnings in your field.
Key Points to Remember
- The national full-time average of $2,083.70 per week excludes salary sacrificed amounts.
- If you salary sacrifice, your taxable income will be lower than your total package, so you may appear below the average even if your total remuneration is above it.
- The ABS provides a separate cash earnings series that includes sacrifice, but the standard average is the one used on this site.
- Salary sacrificing can reduce your tax, but it also reduces the income shown on your payslip and in comparisons to official averages.
For more information on how the figures are set, see How the figures are set. If you have further questions about salary sacrificing and your pay, consult the ATO or a qualified tax professional.