Does salary packaging reduce my super?

Usually yes. Super is calculated on your reduced (post-packaging) salary unless your employer agrees otherwise. Check your contract.

What is a novated lease?

A novated lease is a three-way agreement between you, your employer and a finance company. Your employer deducts the payments from your salary — but usually not all from pre-tax salary. Under the Employee Contribution Method a post-tax contribution equal to the car's FBT taxable value is deducted first, and only the remainder comes out of pre-tax pay. Electric vehicles under the luxury car tax threshold are FBT-exempt, so that taxable value can be nil and much more of the payment is pre-tax.

Can I salary package if I'm a casual employee?

It depends on your employer's policy. Some allow packaging for casuals; others restrict it to permanent staff.

Salary Packaging Calculator Australia

Calculate tax savings from salary packaging including novated leases and other FBT items

See how packaging affects your take-home pay and tax obligations

Salary Packaging Details

Enter your salary and packaged benefits

Annual Salary

Packaged Benefits

Enter your salary packaged benefits (FBT items)

Novated lease — pre-tax deduction (per year)

The pre-tax amount deducted from your salary — not the total lease cost. Under the Employee Contribution Method much of a lease comes out of post-tax pay instead, and only the pre-tax part changes your tax. The novated lease calculator works out the split.

Other Packaged Benefits (per year)

Other FBT items like meal cards, entertainment, etc.

Tax Year

Note: Salary packaging is different from salary sacrifice. Packaged benefits are FBT items where your employer pays FBT. This reduces your taxable income and can save you tax.

Tax Savings Comparison

Compare take-home pay with and without salary packaging

Annual Salary$60,000

Without Packaging

Taxable Income$59,000

Tax Paid$9,285

Take-Home Pay$50,715

With Packaging

Taxable Income$59,000

Tax Paid$9,285

Take-Home Pay$50,715

Note: Salary packaging reduces your taxable income, which means you pay less tax — but the packaged amount comes out of your pay, so your cash take-home falls too. Your employer pays FBT (Fringe Benefits Tax) on these benefits, and for benefits that are not FBT-exempt that cost is usually passed back to you, which this calculator does not model. It shows the tax saving from reducing your taxable income only.

Package optimiser

Sacrificing $9,000 to super would use your remaining concessional cap. That is $3,015 less personal tax, less $1,350 contributions tax the fund pays on the way in — a net $1,665 difference, with the money preserved until you meet a condition of release.

Suggested super sacrifice: $9,000

How to Use This Calculator

1Enter your annual gross salary
2Add your novated lease pre-tax deduction amount (if applicable)
3Add other salary packaged benefits (meal entertainment, laptop, etc.)
4Select the tax year
5Compare your take-home pay with and without packaging

What Is Salary Packaging?

Salary packaging (also called salary sacrifice) lets you pay for certain expenses from your pre-tax salary rather than after-tax income. This reduces your taxable income and can lower your overall tax.

Common packaged items include novated vehicle leases, superannuation contributions, laptops, work-related expenses and (for eligible employers) meal entertainment and living expenses.

How Salary Packaging Saves Tax

Reduced taxable income: Packaged amounts come off your gross salary before tax is calculated, lowering your tax bracket.
FBT considerations: Some benefits attract Fringe Benefits Tax (FBT). Novated leases use the Employee Contribution Method to minimise FBT.
Exempt benefits: Certain items like laptops, tools of trade and work-related training are FBT-exempt.
Employer eligibility: Not all employers offer salary packaging. NFPs and public hospitals often have generous caps.

What changes the answer

•Packaging is only available where an employer offers it, and the caps differ by employer.
•A novated lease's value turns on the car's FBT treatment: electric vehicles under the luxury car tax threshold are exempt, so no post-tax contribution is needed and more of the payment is pre-tax.
•Not-for-profit and hospital employees have their own FBT-exempt caps, and the ATO sets them as grossed-up amounts: $30,000 for public benevolent institutions and health promotion charities, $17,000 for public and not-for-profit hospitals and public ambulance services, plus a separate $5,000 for salary-packaged meal entertainment. The $15,900 and $2,650 figures often quoted are those caps divided by the 1.8868 gross-up rate, which applies only where the employer cannot claim GST credits.
•Packaging and salary sacrifice to super both reduce taxable income, but not by the same amount and not with the same access: super is preserved until you meet a condition of release.

Frequently Asked Questions

Official Sources

Estimates only. Not financial or tax advice. Full disclaimer for your rights and our limitations of liability.

About this calculator

This calculator exists to show you the arithmetic. It applies published Australian rates, thresholds and formulas to the numbers you enter and shows the working, so you can check it. That is all it does — it produces a number and describes what the number is. It does not recommend anything and it holds no opinion about any financial product.

What can move this result

It only knows the figures you type in. Offsets, deductions, prior-year losses, other income, your partner's position and anything you have not entered are not in the result, and any of them can move it a long way.
Rates and thresholds change, sometimes mid-year and occasionally with retrospective effect. Each calculator shows the financial year and the verification date it is working from — outside that year the result is wrong rather than approximate.
Assumptions are set to a reasonable default and every non-statutory one can be changed. Defaults are not predictions, and a small change to a growth or inflation assumption compounds into a large change in a long projection.
Where a result reaches two or more years into the future it is shown in today's dollars as well as future dollars, because a future-dollar figure overstates what the money will actually buy.
It is a generic calculator. It is not built around any particular product, it does not compare the market, and it cannot tell you whether a product is suitable for you.

This calculator is not intended to be relied on for the purposes of making a decision in relation to a financial product. Before you make a financial decision, consider obtaining advice from someone who holds an Australian Financial Services Licence. We do not, and we cannot advise you.

Related Tools

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Salary Sacrifice Super Calculator

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About this calculator

What can move this result

It only knows the figures you type in. Offsets, deductions, prior-year losses, other income, your partner's position and anything you have not entered are not in the result, and any of them can move it a long way.
Rates and thresholds change, sometimes mid-year and occasionally with retrospective effect. Each calculator shows the financial year and the verification date it is working from — outside that year the result is wrong rather than approximate.
Assumptions are set to a reasonable default and every non-statutory one can be changed. Defaults are not predictions, and a small change to a growth or inflation assumption compounds into a large change in a long projection.
Where a result reaches two or more years into the future it is shown in today's dollars as well as future dollars, because a future-dollar figure overstates what the money will actually buy.
It is a generic calculator. It is not built around any particular product, it does not compare the market, and it cannot tell you whether a product is suitable for you.