Does meal and entertainment salary packaging reduce my minimum wage entitlement?

No. Salary packaging is a voluntary arrangement that reduces your taxable income, but your employer must still pay you at least the applicable minimum wage (national minimum, award, or enterprise agreement rate) before any salary sacrifice. The Fair Work Ombudsman enforces minimum wage obligations regardless of packaging.

How does superannuation work with meal and entertainment salary packaging?

Superannuation guarantee contributions are calculated on your ordinary time earnings, which generally include salary sacrifice amounts. Your employer must pay 12% super on top of your ordinary time earnings, even if you salary package part of your pay. The ATO provides guidance on what counts as ordinary time earnings.

Can I use meal and entertainment salary packaging if I am paid under an award?

Yes, but the award or enterprise agreement may have specific rules about salary packaging. Your base rate of pay cannot fall below the award minimum rate. Salary packaging does not change the minimum hourly or weekly rate you must receive. Check your award or agreement, or contact the Fair Work Ombudsman for advice.

Meal and Entertainment Salary Packaging and the Australian Minimum Wage

The legal minimum wage is $26.44 per hour or $1,004.90 per week for adult award-free employees, but meal and entertainment salary packaging is a tax arrangement that does not set a pay floor; precise market rates for packaged roles are not in this reference.

Meal and Entertainment Salary Packaging and Your Pay Floor

Meal and entertainment salary packaging is a tax concession available to many Australian employees, particularly those working for not-for-profit organisations or under specific salary sacrifice arrangements. It allows you to use pre-tax income to pay for certain meal and entertainment expenses, reducing your taxable income. However, it does not change the fundamental obligation of your employer to pay at least the legal minimum wage.

The Legal Minimum Wage

The Fair Work Commission sets the national minimum wage. From 1 July 2026, the adult national minimum wage is $26.44 per hour or $1,004.90 per week for a 38-hour ordinary week. Casual employees receive a loading of 25%, making the casual minimum $33.05 per hour. These rates apply to national-system employees who are award-free and agreement-free. Most private-sector employees are in the national system.

If you are covered by a modern award or enterprise agreement, your minimum pay may be higher. The award backstop ensures that no ongoing classification falls below the national minimum. Introductory rates (first six months) are $25.74 per hour or $978.10 per week. Juniors, apprentices, and trainees have their own percentage-based minimums. For example, a 17-year-old award-free junior earns $15.29 per hour (57.8% of the adult rate).

How Salary Packaging Interacts with Minimum Pay

Meal and entertainment salary packaging is a voluntary agreement between you and your employer. It reduces your taxable salary but does not reduce the gross wage your employer must pay. Your employer must still pay you at least the applicable minimum wage (national, award, or agreement rate) before any salary sacrifice. The Fair Work Ombudsman explains that salary packaging cannot be used to pay below the minimum wage.

For example, if your award rate is $28.00 per hour, your employer must pay you $28.00 per hour gross. You can then choose to salary package a portion of that $28.00 for meal and entertainment expenses, reducing your taxable income. But your employer’s obligation to pay $28.00 per hour remains.

Separating the Legal Minimum from Other Pay Concepts

It is important to distinguish the legal minimum from survey averages, award rates, and negotiated salaries. The ABS May 2026 survey reports full-time adult ordinary-time earnings of $2,083.70 per week and all employees average total earnings of $1,579.20 per week. These are averages, not minimums. Award rates are set by the Fair Work Commission for specific industries and occupations. Enterprise agreements can set higher rates. Meal and entertainment salary packaging is a tax arrangement, not a pay rate. This guide does not provide a precise market rate for packaged roles because the reference does not contain such a figure.

Superannuation on Top

Employers must pay superannuation guarantee contributions on top of your ordinary time earnings. From 1 July 2026, the rate is 12%. Super is calculated on your ordinary time earnings, which generally include salary sacrifice amounts. So even if you salary package part of your pay for meals and entertainment, your employer still pays super on that amount. This is an additional employer cost beyond your gross wage.

Award and Agreement Rates Can Be Higher

If you are covered by a modern award or enterprise agreement, your minimum rate may be higher than the national minimum. The award or agreement may also have specific clauses about salary packaging. Always check your award or agreement. The Fair Work Ombudsman provides resources to help you find your correct classification and rate. For more information on which minimum wage applies, see our Which minimum wage applies guide. For detailed rate tables, visit our Rate tables page.

Key Points to Remember

Meal and entertainment salary packaging does not change your minimum wage entitlement.
Your employer must pay at least the applicable minimum wage before any salary sacrifice.
Superannuation is paid on ordinary time earnings, including salary sacrifice amounts.
Juniors, apprentices, and trainees may receive lower minimum rates.
Awards and enterprise agreements can set higher minimums.

For further reading, see our Guides section and Topics page.

Disclaimer

This information is for orientation only. It is not a pay determination, tax advice, or legal advice. Always consult the Fair Work Ombudsman, the ATO, or a qualified professional for your specific situation.