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Aged Care Salary Packaging: How It Affects Your Pay on the Salary Index
Understand how aged care salary packaging works and where your gross pay sits on the Australian salary index. Learn about the impact on take-home pay and award rates.
Aged care workers' gross pay is uncertain without a specific role, but the health care and social assistance industry index is 97.8, slightly below the national line of 100.
What is aged care salary packaging?
Aged care salary packaging is a tax-effective arrangement where you sacrifice part of your pre-tax salary in exchange for benefits such as living expenses, a car, or superannuation contributions. It is common in the not-for-profit aged care sector and can increase your take-home pay without changing your gross ordinary-time earnings.
Where does aged care pay sit on the salary index?
The Salary Index measures gross annual ordinary-time earnings against a national line of 100, which is $108,352 per year (based on ABS Average Weekly Earnings, May 2026). For the health care and social assistance industry, the index is 97.8, meaning the average gross pay in that sector is about $106,000 per year. However, aged care workers often earn less than the industry average because many are employed under award classifications that start below $60,000.
For example, a personal care worker on the Aged Care Award might earn around $55,000 gross per year, giving an index of about 50.8. That is well below the national line. Salary packaging does not change that index number because the index uses gross pay before any sacrifice. But it does improve net income, which is what you actually take home.
How salary packaging works in aged care
Under typical arrangements, you can salary package up to $15,900 per year for living expenses (such as rent, mortgage, or utilities) and an additional $2,650 for entertainment benefits. These amounts are deducted from your pre-tax salary, reducing your taxable income. For someone earning $55,000, packaging the full $15,900 would bring taxable income down to $39,100, saving about $4,770 in tax (at the 30% marginal rate plus Medicare levy).
Not all aged care employers offer salary packaging. It is most common in not-for-profit organisations, including religious and charitable aged care homes. For-profit providers generally do not offer the same benefits. Always check your employment contract or ask your payroll department.
Award rates and the national minimum wage
The national minimum wage from 1 July 2026 is $26.44 per hour, or $1,004.90 per week (index 48.2). However, modern awards set higher minimum rates. The Aged Care Award, for instance, has multiple classification levels. A personal care worker Level 1 might earn around $28 per hour, while a more experienced worker could earn $30 or more. These rates are above the national minimum but still below the national average earnings.
Superannuation is also important. From 1 July 2026, the super guarantee is 12% of your ordinary-time earnings. Salary packaging can affect super if you sacrifice into super, but the employer’s compulsory contributions are based on your gross pay before sacrifice.
Tax considerations
Resident tax rates for 2026–27 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; and 45% above $190,000. The Medicare levy is 2%. Salary packaging reduces your taxable income, so you may drop into a lower tax bracket. However, the Medicare levy surcharge and HELP repayments are based on your gross income, not your packaged income.
Comparing with other industries and states
The industries page shows that mining has an index of 154.7, while retail trade is 75.9 and accommodation and food services is 72.5. Aged care falls under health care and social assistance, which at 97.8 is slightly below the national line. State indices also vary: for example, NSW is 101.2, Victoria is 98, and Tasmania is 88.6. If you work in aged care in Tasmania, your pay is likely lower than the national average, but salary packaging can help offset that.
How to use the salary index for your pay
The how the index works page explains that you can calculate your personal index by dividing your gross annual ordinary-time earnings by $108,352 and multiplying by 100. If you earn $60,000, your index is 55.4. If you earn $80,000, it is 73.8. Salary packaging does not change that number, but it does change how much tax you pay.
For more on pay guides and award rates, see the pay guides section. You can also explore topics related to salary packaging and tax.
Final thoughts
Aged care salary packaging is a valuable tool to increase your net income, but it does not affect your position on the salary index. The index remains a measure of gross earnings. If you are considering a role in aged care, ask about salary packaging options and compare the total remuneration package, including super and any packaging benefits, against the national benchmarks.
Questions people ask
Does aged care salary packaging affect my salary index number?
No. The salary index is based on your gross ordinary-time earnings before any salary sacrifice. Salary packaging reduces your taxable income but does not change the gross figure used to calculate your index. For example, if your gross annual pay is $60,000, your index is about 55.4 regardless of how much you salary package.
What is the typical salary packaging limit for aged care workers?
For employees of public hospitals and many not-for-profit aged care providers, the standard cap is $15,900 per year for living expenses (e.g., rent, mortgage) plus $2,650 for entertainment benefits. These limits are set by the ATO and can significantly boost take-home pay. However, not all aged care employers offer salary packaging, so check your contract.
How does the aged care salary index compare to the national average?
The health care and social assistance industry index is 97.8, meaning the average gross ordinary-time earnings in that sector are about 2.2% below the national line of 100. For aged care specifically, many workers are on award rates that are below the industry average, so individual pay may be lower. Salary packaging helps close the gap in net income.