EML Salary Packaging and the Australian Minimum Wage: A Practical Check

EML Salary Packaging and the Australian Minimum Wage

If you are using EML salary packaging, you might wonder how it affects your pay floor. Salary packaging (also called salary sacrificing) lets you exchange part of your pre-tax salary for benefits such as a car, electronic devices, or additional super contributions. EML is one provider that administers these arrangements. However, salary packaging does not change the legal minimum wage that applies to you.

The Legal Minimum Wage

From 1 July 2026, the national minimum wage is $26.44 per hour, or $1,004.90 per week for a full-time adult employee working 38 ordinary hours. This rate is set by the Fair Work Commission and applies to award-free and agreement-free national-system employees. If you are a casual employee, the minimum is $33.05 per hour (including the 25% casual loading). These figures are the floor – your gross pay cannot be lower, regardless of any salary packaging arrangement.

How Salary Packaging Interacts with the Minimum

When you enter a salary packaging agreement through EML, your employer reduces your taxable salary by the packaged amount and provides a benefit instead. Your gross wage (the amount before packaging) must still meet the legal minimum. For example, if your base salary is $55,000 per year and you package $10,000, your gross wage remains $55,000 – the packaging is a deduction from that gross amount. The minimum wage applies to your gross wage, not your taxable income. So salary packaging does not allow your employer to pay you below $26.44 per hour.

Award Rates and Enterprise Agreements

Many employees are covered by a modern award or an enterprise agreement. These can set higher minimum rates than the national minimum wage. For instance, the lowest ongoing classification in a modern award cannot be less than $26.44 per hour from 1 July 2026, but many awards have higher rates for specific roles. If your award or agreement specifies a higher rate, that is your floor – salary packaging cannot reduce it. Check your award on the Fair Work Ombudsman website or refer to our Which minimum wage applies guide.

Superannuation on Top

Remember that superannuation guarantee (12% from 1 July 2026) is an employer payment on top of your ordinary time earnings. This includes salary sacrificed amounts. So if you package part of your salary, your employer must still pay super on the full ordinary time earnings (subject to some limits). The ATO provides detailed rules, but generally, salary packaging does not reduce your super entitlement.

Survey Averages vs. Legal Minimum

The Australian Bureau of Statistics (ABS) reports average earnings. In May 2026, full-time adult ordinary-time earnings were $2,083.70 per week, and all employees average total earnings were $1,579.20 per week. These are not legal floors – they are market averages. Your salary-packaged wage may be above or below these averages, but the legal minimum is the only enforceable floor. If you are negotiating a salary, remember that the minimum is $26.44 per hour, and your actual rate may be higher based on your skills, industry, and agreement.

Practical Check: Compare Your Hourly Rate

To see if your pay meets the minimum, take your gross weekly wage (before tax and before salary packaging deductions) and divide by your ordinary hours. If the result is less than $26.44 (or the applicable award rate), your employer may be underpaying you. Salary packaging does not change this calculation. For casuals, the minimum is $33.05 per hour. Use our Rate tables to see the full set of minimums for juniors, apprentices, and supported wages.

Important Notes

• The national minimum wage applies to national-system employees who are award-free and agreement-free. Most private-sector employees are in the national system. Some state public sector and local government employees, and some Western Australian sole traders and partnerships, are covered by state awards.
• Junior rates, apprentice rates, and supported wages can be lower than the adult minimum. The reference table on this site shows the percentages for award-free juniors.
• This guide is for orientation only. It is not a pay determination, tax advice, or legal advice. For specific questions about your EML salary packaging arrangement, consult your employer, EML, or a qualified professional.

Further Reading

Learn more about how minimum wages are calculated in our How the figures work guide. For a full list of current and historical rates, see the Rate tables.