EML Salary Packaging: How State and Industry Differences Affect Your Take-Home Pay

What is EML salary packaging?

EML salary packaging is a service that helps employees arrange salary sacrifice agreements with their employers. Salary packaging (also called salary sacrificing) lets you pay for certain expenses with pre-tax dollars, lowering your taxable income. The result is a higher take-home pay for the same gross salary. EML is one of several providers that administer these arrangements, handling the paperwork and compliance with Australian Tax Office rules.

Salary packaging is common in not-for-profit organisations, where employees can package up to $15,900 per year for living expenses (plus an extra $2,650 for entertainment benefits). In the private sector, packaging often covers cars, superannuation, or work-related items. The key benefit is the tax saving: you avoid paying income tax and the 2% Medicare levy on the packaged amount.

How salary packaging relates to the national salary index

The Salary Index measures gross full-time adult ordinary-time earnings. The national line is 100, which corresponds to $108,352 per year (based on ABS Average Weekly Earnings, May 2026). Salary packaging does not change your gross earnings, so your index figure remains the same. However, your effective spending power can increase because you keep more of what you earn.

For example, if you earn $108,352 and package $10,000, your taxable income drops to $98,352. Depending on your marginal tax rate (30% in the 2026–27 brackets for that income level), you save about $3,000 in tax plus $200 in Medicare levy – a total saving of $3,200. That is extra money in your pocket, even though your salary index stays at 100.

State differences in salary packaging value

State indices show how average earnings vary across Australia. For instance, the ACT has an index of 109.9 ($119,090 annualised), while Tasmania sits at 88.6 ($96,008). Because salary packaging saves tax at your marginal rate, the benefit is larger in states with higher average earnings (and thus higher tax brackets). A worker in the ACT on a higher salary may save more per dollar packaged than a worker in Tasmania on a lower salary.

However, state-specific factors like cost of living can also matter. In expensive states such as NSW (index 101.2) or Victoria (98), packaging housing or transport costs can be especially valuable. The tax savings themselves are the same across Australia, but the practical benefit may be more pronounced where everyday expenses are higher. For a detailed breakdown of state pay differences, see our states.

Industry differences in salary packaging access

Certain industries have higher uptake of salary packaging, especially in not-for-profit sectors. The industries page shows that health care and social assistance has an index of 97.8, and education and training is 105.5. Employees in these fields often have access to generous packaging caps for living expenses. In contrast, retail trade (75.9) and accommodation and food services (72.5) typically have lower earnings and fewer packaging options. If you work in a lower-paying industry, salary packaging can still help boost net income if your employer offers a scheme.

For example, a nurse in health care earning around the industry average of $105,000 (index 97.8) could package living expenses and save at the 30% tax rate. That same benefit would be less valuable than for a retail worker on $80,000 (lower bracket), but the tax saving is smaller. But if the retail worker has access to a car packaging option, it can still make a difference.

Practical considerations and tax implications

When using EML salary packaging, remember that the super guarantee is 12% from 1 July 2026, and salary sacrifice to super is a common form of packaging. This can boost retirement savings while reducing tax. The tax-free threshold is $18,200, and the Medicare levy is 2%. Salary packaging does not affect these thresholds, but it reduces the income subject to them.

It is important to check with your employer whether they offer salary packaging and what benefits are allowed. Not all employers partner with providers like EML. Also, some packaging may incur fringe benefits tax (FBT) for certain items, but many common benefits (like super or work-related expenses) are exempt or have concessions.

For more on how the index is calculated and what it means for your pay, see how the index works. You can also explore pay guides for award rates and industry benchmarks.

Conclusion

EML salary packaging is a tool to increase your take-home pay without changing your gross salary or salary index. The value of packaging depends on your marginal tax rate, which is influenced by your state’s average earnings level and your industry. While the national index gives a snapshot of gross earnings, salary packaging can improve your financial position, especially if you work in a high-tax bracket or in a not-for-profit sector with generous caps. Always consider your personal circumstances and consult a tax professional or your employer’s HR team.