Salary Packaging Calculator
See what salary packaging saves a hospital, ambulance or charity worker, and what it does to the income tests most calculators leave out. The packaged amount leaves taxable income, but its grossed-up value comes back as a reportable fringe benefits amount that lifts HELP repayments and can trigger the Medicare levy surcharge. Salary sacrifice into super is a different arrangement, open to any employee, and has its own page, the Salary Sacrifice Calculator.
Your details
If an employer is both a public benevolent institution and a hospital, the hospital cap applies.
Up to $9,009 at a hospital or ambulance service and $15,899 at a charity, before grossing up.
A separate cap. Up to $2,649 of spending before grossing up.
Tax and levy saved a year
$2,968.02
- Saved a fortnight
- $114.15
- Taxable income without packaging
- $70,000
- Taxable income with packaging
- $60,991
- Income tax and levy without packaging
- $12,920.00
- Income tax and levy with packaging
- $9,951.98
- Packaged a fortnight
- $346.50
- Reportable fringe benefits amount
- $16,998
- Grossed-up value against the $17,000 cap
- $16,998.18
The packaged amounts leave taxable income. Their grossed-up value returns as a reportable fringe benefits amount, which is not taxed but counts towards study loan repayment income and income for the Medicare levy surcharge. The FBT year starting 1 April 2027 falls inside 2026-27. Its rates and caps are not yet published, so the current FBT year is carried forward for those months.
Worked examples, with the arithmetic.
The same sums the tool runs, on real figures. Every number below is computed by the tested engine from the published rates, so the prose and the tool can never disagree.
What does a $70,000 hospital worker save by packaging to both caps?
$9,009.96 + $2,649.99 packaged $70,000 - $11,659.95 = $58,340.05 taxable tax and levy before = $12,920.00 tax and levy after = $9,063.92 saved = $3,856.08 $11,659.95 x 1.8868 = $22,000 reportable HELP repayment rises by = $1,551.01
Packaging the $17,000 hospital cap and the $5,000 entertainment cap takes $11,659.95 out of taxable income and saves $3,856.08 of tax and levy, $148.31 a fortnight. The $22,000 reportable amount is not taxed, but with a HELP debt it lifts repayment income to $80,340 and the compulsory repayment by $1,551.01, which pays the loan down faster.
Can packaging push a $100,000 charity worker into the Medicare levy surcharge?
$100,000 - $15,899.94 = $84,100.06 taxable tax and levy saved = $5,087.98 $84,100.06 + $30,000 RFBA = $114,100.06 for MLS $114,100.06 x 1% = $1,141.00 surcharge saving after the surcharge = $3,946.98
Yes, without hospital cover. Taxable income falls to $84,100.06, but the $30,000 reportable amount is added back for the surcharge, so income for MLS purposes is $114,100.06, over the $105,000 single threshold. The 1% surcharge of $1,141.00 is charged on the whole amount and cuts the $5,087.98 saving to $3,946.98. Hospital cover removes it.
Is this accurate, and how does it work?
The method is published rather than described. Nothing here is a black box, and the limits are listed as plainly as the workings.
- 1Work out which cap applies. Public and not-for-profit hospitals and public ambulance services have a $17,000 grossed-up FBT exemption cap per employee. Public benevolent institutions other than hospitals, and health promotion charities, have $30,000. Both carry a separate $5,000 cap for salary packaged meal entertainment and venue hire. The caps are grossed-up values, so the benefits you can package are those figures divided by 1.8868.
- 2Take the packaged amount out of taxable income. An effective arrangement is agreed before the work is done and you never have access to the sacrificed salary, so it is not taxable income. Direct debits from your pay are not salary sacrifice, and you cannot claim a deduction for an expense your employer paid this way. Income tax, the Low Income Tax Offset and the Medicare levy are then worked out on the lower figure.
- 3Gross the benefits back up as a reportable amount. Once the taxable value exceeds $2,000 in the FBT year, the grossed-up value goes on your income statement as a reportable fringe benefits amount, always at the lower rate of 1.8868 and truncated to the dollar. It is not taxed, but it is added back for the income tests.
- 4Add it back for the Medicare levy surcharge. Income for MLS purposes includes the full reportable amount. Without appropriate hospital cover, packaging can lift you over the $105,000 single threshold on money that is not taxable income, and the surcharge is charged on the whole figure, which the Medicare Levy Surcharge Calculator shows tier by tier.
- 5Add it back for study loan repayments. Repayment income for HELP and the other study loans, the figure the HECS Repayment Calculator starts from, also includes the full reportable amount. A higher compulsory repayment is shown separately rather than netted off the saving, because it pays the debt down faster.
- 6Add it back for Family Tax Benefit. Adjusted taxable income, the figure Family Tax Benefit is tested on, includes reportable fringe benefits as well, so packaging does not raise Part A or Part B. Enter the higher figure in the Family Tax Benefit Calculator.
- 7Match the FBT year to the income year. The FBT year runs 1 April to 31 March and the income year 1 July to 30 June. The reportable amount for the FBT year ending 31 March 2027 lands on the 2026-27 income statement. The calculator assumes steady packaging across the year so the two line up, and carries the current FBT figures into the year starting 1 April 2027, which the ATO has not yet published.
The 2026-27 tax brackets this runs on.
Resident rates. Income is taxed in slices, so only the part inside a bracket pays that bracket rate. The Medicare levy of 2% applies on top of these.
| Taxable income | Rate on this slice |
|---|---|
| $0 to $18,200 | Nil |
| $18,201 to $45,000 | 15c per dollar |
| $45,001 to $135,000 | 30c per dollar |
| $135,001 to $190,000 | 37c per dollar |
| $190,001 and over | 45c per dollar |
What this does not cover.
- It models FBT-exempt employers only: public and not-for-profit hospitals, public ambulance services, public benevolent institutions and health promotion charities. Rebatable employers are explained, not calculated.
- It treats every packaged benefit as type 2, grossed up at 1.8868, which the ATO confirms for meal cards and school fees. A benefit the employer can claim GST credits on grosses up at 2.0802 and uses the cap faster.
- It assumes steady packaging across a full year so the FBT year and income year amounts match, and does not include provider administration or card fees.
- It does not model novated leases or any car fringe benefit, which the ATO counts inside the same cap.
- It does not model family assistance, child support or Centrelink income tests, or a spouse and the family surcharge thresholds.
- FBT rates and caps for the FBT year starting 1 April 2027 are not yet published and are carried forward. From that date, work-related items packaged under an arrangement also become subject to FBT.
- The ATO does not provide advice on entering or rejecting a salary sacrifice arrangement, and neither does this page.
Where these figures come from.
- ATO, Fringe benefits tax rates and thresholds, the source gave its own last updated date as 2026-05-20. Retrieved 2026-09-17.
- ATO, Fringe benefits tax rates and thresholds, FBT year ending 31 March 2028, the source gave its own last updated date as 2026-05-20. Retrieved 2026-09-17. Not yet published for 2026-27: this is the prior year’s figure carried forward and labelled as such, never estimated. It is corrected as soon as the ATO publishes.
- ATO, Consequences of having a reportable fringe benefits amount, the source gave its own last updated date as 2026-06-05. Retrieved 2026-09-17.
- ATO, Study and training loan repayment thresholds and rates, the source gave its own last updated date as 2026-06-30. Retrieved 2026-09-11.
- ATO, Medicare levy surcharge income, thresholds and rates, the source gave its own last updated date as 2026-06-22. Retrieved 2026-09-11.
- ATO, Tax rates for Australian residents, the source gave its own last updated date as 2026-08-13. Retrieved 2026-09-02.
- ATO, Medicare levy reduction for low-income earners, the source gave its own last updated date as 2026-06-30. Retrieved 2026-09-02. Not yet published for 2026-27: this is the prior year’s figure carried forward and labelled as such, never estimated. It is corrected as soon as the ATO publishes.
Every rate this site uses is listed on the Methodology page.
Common questions.
What is the salary packaging cap for hospital and ambulance workers?
The ATO caps the FBT exemption at $17,000 of grossed-up value per employee per FBT year for public hospitals, not-for-profit hospitals and public ambulance services. At the type 2 gross-up rate of 1.8868 that is $9,009.96 of benefits, which is where the $9,010 and $9,009 figures on provider sites come from. A separate $5,000 grossed-up cap covers salary packaged meal entertainment and venue hire.
What is the salary packaging cap for charity and PBI workers?
$30,000 of grossed-up value per employee per FBT year for public benevolent institutions other than public hospitals, and for health promotion charities. Divided by 1.8868 that is $15,899.94 of benefits, the $15,900 most providers quote. If an organisation is both a registered PBI and a public or not-for-profit hospital, the hospital cap of $17,000 applies instead.
Does salary packaging increase my HELP repayment?
Usually, yes. Repayment income is taxable income plus the full reportable fringe benefits amount, so the grossed-up value of what you packaged is added back. In the ATO example, Olivia has $70,000 of taxable income and a $450 repayment for 2025-26, and a $17,000 reportable amount lifts it to $3,000. The extra repayment reduces the debt faster, which is why this page shows it separately rather than netting it off the saving.
Can salary packaging make me pay the Medicare levy surcharge?
Yes, if you do not hold private hospital cover. Income for MLS purposes includes the full reportable fringe benefits amount, so a single worker on $100,000 who packages the $30,000 PBI cap has $84,100 of taxable income but $114,100 for surcharge purposes, over the $105,000 threshold. The 1% surcharge is charged on the whole $114,100, which is $1,141. Appropriate hospital cover for the full year removes it.
What is a reportable fringe benefits amount?
The grossed-up value of the fringe benefits you received in the FBT year, shown on your income statement once their taxable value exceeds $2,000. It is always grossed up at the lower rate of 1.8868, whether the benefits were type 1 or type 2, and truncated to the dollar, so $2,000.01 of benefits reports as $3,773. You are not taxed on it, but it counts in the income tests for the Medicare levy surcharge, study loan repayments, Division 293, the private health insurance rebate, family assistance and child support. The Division 293 Calculator starts from income for surcharge purposes, which includes it.
When does the salary packaging year start and end?
The FBT year runs from 1 April to 31 March, not 1 July to 30 June like the income year. The caps apply per FBT year, and the reportable amount for the FBT year ending 31 March 2027 appears on your 2026-27 income statement. Because the two years overlap, a full income year of packaging spans two FBT years.
How much meal entertainment can I salary package?
Meal entertainment and entertainment facility leasing, which covers venue hire, packaged through an FBT-exempt employer are exempt only while their grossed-up value is $5,000 or less in the FBT year. That is $2,649.99 of spending at the 1.8868 rate. The cap sits alongside the general cap rather than inside it, and the ATO treats a meal card as a type 2 benefit because it is an input taxed financial supply. Packaged entertainment is reportable even though it is exempt from FBT, and in the ATO 2026 worked example the part over $5,000 counts against the general cap.
Can I salary package my rent or mortgage?
The ATO lists payment of your expenses, such as loan repayments, school fees and childcare costs, among the common fringe benefits, so mortgage repayments are covered and count inside the general cap. Rent paid on your behalf is an expense payment of the same kind, but the ATO pages this site relies on do not name it, so confirm it under your employer arrangement before counting on it. Either way it is only worthwhile through an FBT-exempt employer.
Do I get the full cap if I start part way through the year?
Yes. The ATO states that the per employee capping threshold applies even if the employer employed the specific employee for less than the full FBT year. Someone who starts in January can package up to the full cap before 31 March, and a new cap opens on 1 April. This calculator assumes steady packaging across a full year, so a part-year start means spreading the cap over fewer pays.
Does salary packaging affect Centrelink or family payments?
It can. For family assistance and youth income support payments, 53% of the reportable fringe benefits amount is counted when your employer is a public benevolent institution, health promotion charity, public or not-for-profit hospital or public ambulance service. The full amount is used for every other payment and test, including child support. This calculator does not model those income tests.
Does a novated lease use up my salary packaging cap?
In the ATO 2026 worked example for a public benevolent institution, car fringe benefits count inside the $30,000 cap: Wendy has a $25,000 car benefit that grosses up to $52,005, which is $22,005 over the cap, or $35,005 over at a public hospital. A novated lease is a car fringe benefit, so its grossed-up value sits inside the same cap as everything else you package. This page does not model cars.
Is salary packaging worth it if my employer is not a hospital or charity?
Rarely, for a taxable benefit. The type 2 gross-up of 1.8868 is 1 divided by 0.53, so FBT at 47% on the grossed-up value costs exactly what you would pay earning the money at the top marginal rate of 45% plus the 2% levy. Below that bracket, packaging a benefit with the FBT passed back to you leaves you worse off. Rebatable employers get 47% of the FBT back on the first $30,000 of grossed-up benefits, which this page explains but does not calculate. Salary sacrifice into super is open to every employee and works differently.
Related pages.
- Salary Sacrifice CalculatorSee what salary sacrificing into super saves in tax and costs in take-home pay, with the 15% contributions tax netted off.
- HECS Repayment CalculatorWork out your compulsory HECS, HELP or STSL study loan repayment for 2026-27 on the marginal thresholds that replaced the old flat-rate tables.
- Medicare Levy Surcharge CalculatorWork out whether the Medicare levy surcharge applies to you and what it costs, with the 2026-27 single and family thresholds.
- Income Tax CalculatorWork out income tax, the Medicare levy and the low income tax offset on any salary for 2026-27, with the bracket-by-bracket working shown.
Every calculator on this site is listed on the Wage Calculator page.