Salary Packaging Calculator Australia 2026–27

How salary packaging works at charities, PBIs and hospitals

Salary packaging (also called salary sacrifice) means agreeing with your employer to receive part of your pay as benefits instead of cash. Normally the employer pays fringe benefits tax (FBT) on those benefits, which removes most of the advantage. Some not-for-profit employers are exempt from FBT up to a cap per employee, so they can pay your rent, mortgage, bills or credit card from your pre-tax salary at no extra cost.

The caps are set as grossed-up values and apply to each FBT year (1 April to 31 March). They have not changed for the FBT years ending 31 March 2023 to 31 March 2027. Divided by the type 2 gross-up rate of 1.8868, they become the taxable value you can actually package:

Worked example: $75,000 at a charity

An employee of a public benevolent institution earns $75,000 and packages the full $15,900 of general expenses plus $2,650 of meal entertainment. Taxable income falls to $56,450. Tax and Medicare fall from $14,520 to $8,431. Cash take-home drops to $48,019, but $18,550 of bills has already been paid, so spendable income rises from $60,480 to $66,569: $6,089 a year, or $234 a fortnight. At a hospital, with the lower cap, the gain is $3,781.

Packaging providers often charge an administration fee; enter it in the calculator to see the net gain.

Reportable fringe benefits: the effect on HELP, MLS and family payments

Packaged benefits are tax-free, but they are not invisible. When the taxable value of your benefits exceeds $2,000 in an FBT year, your employer reports a reportable fringe benefits amount (RFBA) on your income statement: the taxable value × 1.8868. The ATO's example: benefits with a taxable value of $3,500 give an RFBA of $6,603. Benefits that are exempt only because the employer is FBT-exempt are still reportable.

The RFBA is not taxed, but it is added back for income tests. It counts in your HELP repayment income and in the income used for the Medicare levy surcharge, and it is included in income tests for family payments. In the example the RFBA is $35,000, so income for these tests is $91,450, higher than the original salary. With a HELP debt, the compulsory repayment is $3,288 after packaging against $821 without it. Tick the HELP box in the calculator to see the effect for your salary.

Meal entertainment and holiday accommodation

On top of the general cap you can package meal entertainment (restaurant meals, catering) and entertainment facility leasing expenses such as holiday accommodation, up to $5,000 grossed-up, about $2,650 a year. Salary-packaged meal entertainment is reportable (ATO class ruling CR 2016/85), so it adds to your RFBA. Spending above the separate cap counts towards the general cap.

Novated leases and the electric car exemption

Any employer can offer a novated car lease. Normally FBT applies, and the usual approach is to pay part of the car costs from after-tax pay (an employee contribution) to cancel the FBT. Battery electric and hydrogen fuel cell cars are different: the private use of an eligible electric car is exempt from FBT if it was first held and used on or after 1 July 2022 and luxury car tax was never payable on it. Plug-in hybrids stopped qualifying from 1 April 2025, apart from existing arrangements. The exemption covers running costs such as registration, insurance, repairs and electricity.

An exempt electric car is still a reportable fringe benefit, so it adds to your RFBA. If you work for a charity or hospital, ask your packaging provider how a novated lease interacts with your cap before signing.

Salary packaging vs salary sacrifice into super

Salary sacrificing into super is a different arrangement. Contributions are taxed at 15% in the fund, count towards the $32,500 concessional cap together with the 12% super guarantee, and are locked away until you meet a condition of release. They are not fringe benefits, but they are reportable super contributions, which also count for HELP and other income tests. Use the salary sacrifice calculator for super.

For any packaging to work, the ATO says the arrangement must be agreed before you do the work, and you must not have access to the sacrificed salary. Bonuses or leave already earned cannot be packaged after the fact.