Salary Packaging Calculator Australia
Salary packaging calculator, 2026–27
| Without packaging | With packaging | |
|---|---|---|
| Taxable income | ||
| Income tax + Medicare (+ HELP) | ||
| Spending money after tax and packaged bills |
Uses 2026–27 resident tax rates, the low income tax offset and 2% Medicare levy. Packaged amounts are capped at the ATO's FBT limits (about $15,900 or $9,010 a year, plus about $2,650 for meal entertainment). Provider administration fees are not included.
If you work for a charity, a public or not-for-profit hospital or a public ambulance service, you can pay part of your everyday living costs with money that has not been taxed. This salary packaging calculator shows how much extra take-home pay that is worth in 2026–27. Choose your employer type, enter how much you want to package and see the tax you save each year and each fortnight.
What is salary packaging?
Salary packaging lets you take part of your salary as benefits instead of cash. Normally that would trigger fringe benefits tax for your employer. Charities and hospitals are exempt from that tax up to a cap for each employee, so they can pay bills like rent, mortgage repayments or utilities for you from your pre-tax salary.
Because the packaged amount is never taxed, your taxable income falls and so does your income tax and Medicare levy. You spend the same money on the same bills, but more of your pay is left over at the end.
Salary packaging caps for 2026–27
The caps are set by the ATO and apply per fringe benefits tax year, which runs from 1 April to 31 March.
| Employer type | Living expenses cap (approx.) | Extra meal entertainment cap (approx.) |
|---|---|---|
| Public benevolent institutions and health promotion charities | $15,900 | $2,650 |
| Public and not-for-profit hospitals, public ambulance services | $9,010 | $2,650 |
| Other employers | No exempt cap | — |
The ATO writes these limits as grossed-up values of $30,000, $17,000 and $5,000. The amounts in the table are the pre-tax spending they allow, which is what most people mean when they talk about their packaging cap.
How much could you save?
These examples use 2026–27 tax rates, assume the full cap is used and ignore provider fees.
| Example | Salary | Amount packaged | Tax saved per year | Extra per fortnight |
|---|---|---|---|---|
| Nurse, public hospital | $80,000 | $9,010 | $2,883 | $111 |
| Nurse, public hospital + meal entertainment | $80,000 | $11,660 | $3,731 | $144 |
| Paramedic, public ambulance | $95,000 | $11,660 | $3,731 | $144 |
| Disability support worker, charity | $60,000 | $15,900 | $5,223 | $201 |
| Case manager, charity | $75,000 | $18,550 | $6,089 | $234 |
| Program manager, charity | $100,000 | $18,550 | $5,936 | $228 |
Charity workers save more than hospital staff because their cap is higher. Within the 30% tax bracket, every $1,000 packaged saves about $320 in tax and Medicare levy.
What you can and cannot package
Usually allowed with an FBT-exempt employer
- Rent or mortgage repayments
- Electricity, gas, water and phone bills
- Credit card or personal loan repayments, depending on your provider
- Living expenses paid through a salary packaging card
- Meal entertainment, such as restaurant meals and venue hire, under its separate cap
Packaged separately, outside the caps
- Extra super contributions. See our salary sacrifice into super calculator for how that works.
- A novated lease on a car
- Some work-related items, such as a laptop used mainly for work
How to set up salary packaging
- Ask your payroll team whether your employer offers salary packaging and which provider manages it.
- Check the provider's administration fee, and compare it with your tax saving from the calculator above.
- Choose the bills you want paid and how much per pay, staying under your cap for the FBT year.
- Sign the agreement before the pay it applies to. Past salary cannot be packaged.
- Check your payslip: your taxable pay should fall and the tax withheld should drop with it. The PAYG tax calculator shows the new amount per pay.
Things to watch
Reportable fringe benefits
Packaged living expenses appear on your income statement as a grossed-up reportable fringe benefits amount. For a full $9,010 hospital package that is about $17,000. It does not increase your tax, but it is added back for HELP repayments, the Medicare levy surcharge income test, some Centrelink payments and child support.
Changing jobs part-way through the year
Caps apply per employer for each FBT year. If you leave, unused packaged funds are usually paid back to you as taxed salary, so try to keep your packaged balance low before you finish.
Low incomes
If your taxable income is already close to the $18,200 tax-free threshold, packaging saves little or no tax. The calculator shows this straight away.
Want to see your pay before and after packaging across a whole year, including super and the Medicare levy surcharge? Run your salary through our Australian take-home pay calculator, then compare it with your packaged figure here.
Salary packaging FAQs
What is the difference between salary packaging and salary sacrifice?
They work the same way: part of your salary is paid as benefits before tax. People usually say salary packaging when they mean the FBT-exempt benefits offered by charities and hospitals, such as rent, mortgage or bill payments, and salary sacrifice when they mean extra super or a novated lease.
Who can use salary packaging for everyday expenses?
Mainly employees of public benevolent institutions and health promotion charities, public and not-for-profit hospitals, and public ambulance services. These employers are exempt from fringe benefits tax up to a set cap for each employee.
Does salary packaging reduce my super?
No. Employers must calculate the 12% super guarantee on your salary before any amount is packaged, so your employer super stays the same.
Does salary packaging affect my HELP repayments or Centrelink?
It can. Packaged living expenses appear on your income statement as reportable fringe benefits, at a grossed-up value. That amount is added back when working out HELP repayments, the Medicare levy surcharge and many government payments. Meal entertainment is not reported this way.
When does the salary packaging cap reset?
Caps apply per fringe benefits tax year, which runs from 1 April to 31 March, not the usual 1 July financial year. Unused amounts do not carry over.
Can I package rent and groceries?
With an FBT-exempt employer, yes. Most providers let you pay rent, mortgage repayments, utilities and other living costs from your packaged amount, often through a salary packaging card. Meal entertainment covers restaurant meals and venue hire, not groceries.