How to compare job offers with my salary packaging

How to compare job offers with my salary packaging

When you're reading a job ad and comparing offers, the phrase "my salary packaging" often comes up. Salary packaging (also called salary sacrifice) is an arrangement where you give up part of your pre-tax salary in exchange for benefits like a car, laptop, or additional super contributions. It's a way to reduce your taxable income and increase your take-home pay, but it also changes how you should compare different job offers.

What salary packaging means for your pay

In Australia, salary packaging is most common in the health care, education, and not-for-profit sectors. For example, a nurse in Victoria might have a base salary of $106,000 (close to the state index of 98, which annualises to $106,137). If they package a car worth $15,000, their taxable income drops to $91,000. At the 30% marginal tax rate (plus 2% Medicare), that saves about $4,800 in tax. Their take-home pay is higher than someone earning $106,000 without packaging.

But the salary index – which measures gross ordinary-time earnings – uses the cash salary before packaging. The national line is $108,352 (index 100). A job ad showing a cash salary of $95,000 would have an index of about 87.7, but if it includes $15,000 in packaged benefits, the total remuneration is $110,000 – above the national line. So when you see "my salary packaging" in an ad, always ask for the total value of the package.

Using the salary index to compare offers

The Salary Index is a useful tool for comparing pay across jobs and locations. It expresses your yearly gross earnings as a number where 100 equals the national average. For instance, a retail worker in Queensland might earn $82,000 (index 75.9), while a professional in the same state earns $115,000 (index 106.9). But if the retail job offers salary packaging and the professional job doesn't, the effective take-home could be closer.

To compare fairly, convert each offer into total remuneration. Add the market value of any packaged benefits to the cash salary. Then divide by $108,352 and multiply by 100 to get an adjusted index. This gives you a better picture of where each offer sits against the national line.

Industry and state differences

Salary packaging availability varies by industry. In health care and social assistance, the average index is 97.8, and packaging is common. In mining (index 154.7), it's less typical. State indices also matter: a job in the ACT (index 109.9) might have higher base pay but less packaging, while a role in Tasmania (index 88.6) might offer packaging to attract talent. Use the states page to see local benchmarks.

Tax and super considerations

Salary packaging reduces your taxable income, which can lower the tax you pay. For the 2026–27 year, resident tax rates start at nil up to $18,200, then 15% to $45,000, 30% to $135,000, 37% to $190,000, and 45% above that. Plus a 2% Medicare levy. If you're in the 30% bracket, packaging $10,000 saves about $3,200 in tax and Medicare. But remember the super guarantee: your employer pays 12% on your reduced salary (up to the maximum contribution base of $270,830). So packaging a car might mean less super. Some people choose to salary sacrifice into super instead, which can be more tax-effective long-term.

Practical tips for comparing offers

• Always ask for a total remuneration breakdown. A job ad that says "my salary packaging available" should be followed by a clear dollar value of benefits.
• Check if the packaged benefits are subject to fringe benefits tax (FBT). Some items like laptops are FBT-exempt if used mainly for work; cars often incur FBT, which the employer may pass on.
• Use the how the index works page to understand how gross earnings are calculated. Remember that the index is a benchmark, not a quote for your specific situation.
• Look at pay guides for award rates in your industry. Awards set minimum wages, but salary packaging is usually a separate arrangement above the award.

Example: comparing two offers

Offer A: Cash salary $100,000, no packaging. Index = 92.3. Take-home (after tax and Medicare) about $76,000.

Offer B: Cash salary $90,000, plus a car valued at $12,000. Total remuneration $102,000. Index = 94.1. After packaging, taxable income is $90,000, so tax is lower. Take-home might be around $70,000 from cash, plus the car benefit. But the car isn't cash – you need to value it. If you would have spent $12,000 on a car anyway, you're better off with Offer B.

Also consider super: Offer A's employer pays 12% on $100,000 = $12,000. Offer B's employer pays 12% on $90,000 = $10,800. So Offer A gives $1,200 more super. Factor that in.

Final thoughts

When you see "my salary packaging" in a job ad, don't just look at the cash figure. Use the salary index to compare total remuneration, and weigh the tax savings against potential super reductions. Talk to the employer about the full package. For more context, explore the topics page on salary packaging and other pay arrangements.