Salary Packaging Companies Australia: Award Coverage and the Legal Minimum Wage

Salary Packaging Companies Australia and the Minimum Wage Floor

When you work for one of the salary packaging companies in Australia, your pay must meet at least the legal minimum. Salary packaging companies provide services that allow employees to sacrifice part of their pre-tax salary for benefits such as cars, laptops, or super contributions. However, the existence of a salary packaging arrangement does not change the employer's obligation to pay at least the national minimum wage or the applicable award rate.

The Legal Floor: National Minimum Wage

From 1 July 2026, the Fair Work Commission has set the adult national minimum wage at $26.44 per hour or $1,004.90 per week for a full-time employee working 38 ordinary hours. This is the baseline for award-free and agreement-free employees in the national system. Most private-sector employees, including those at salary packaging companies, are in the national system. If you are not covered by a modern award or an enterprise agreement, your employer must pay you at least this amount.

However, not every employee receives the full adult rate. Junior employees (under 21) who are award-free are entitled to a percentage of the adult rate. For example, a 17-year-old receives 57.8% of $26.44, which is $15.29 per hour. Apprentices and trainees have their own rates under the Miscellaneous Award. Additionally, some employees may be on an introductory award rate of $25.74 per hour for the first six months if covered by a modern award that includes such a provision.

Casual employees who are award-free receive a 25% loading on the national minimum wage, bringing their minimum to $33.05 per hour. This loading compensates for the lack of paid leave.

Award Coverage for Salary Packaging Companies

Many roles within salary packaging companies may be covered by a modern award. For instance, administrative and clerical staff are often covered by the Clerks Award, while professional roles such as accountants or IT specialists may fall under the Professional Employees Award. If an award applies, the award rate will be higher than the national minimum wage. The award also sets out penalty rates, overtime, and other conditions.

It is important to check which award, if any, covers your specific job. The Fair Work Ombudsman provides tools to help determine award coverage. If you are unsure, you can ask your employer or consult the Which minimum wage applies page on this site for guidance.

Salary Packaging and the Minimum Wage

Salary packaging is a way to reduce your taxable income by sacrificing some salary for benefits. However, this does not reduce the employer's obligation to pay at least the minimum wage. The salary sacrifice arrangement must not result in your cash wages falling below the legal minimum. For example, if you sacrifice $100 per week for a car, your remaining cash wage must still be at least $1,004.90 per week (or the award rate, if higher). The Australian Taxation Office (ATO) regulates salary packaging, but the Fair Work Ombudsman enforces minimum wage compliance.

Superannuation on Top

Employers must also pay the super guarantee, which from 2026-27 is 12% of ordinary time earnings. This is paid on top of the minimum wage or award rate. So if you earn $1,004.90 per week, your employer must contribute an additional $120.59 into your super fund. Salary packaging arrangements can also include additional super contributions, but the compulsory super is separate.

Market Rates vs Legal Minimum

The reference used for this guide does not contain a specific market rate for employees of salary packaging companies. The Australian Bureau of Statistics (ABS) reports that in May 2026, full-time adult ordinary-time earnings averaged $2,083.70 per week, and all employees averaged $1,579.20 per week. These figures include all industries, not just salary packaging. Actual salaries in the salary packaging industry may be higher or lower depending on the role, experience, and location. For a precise market rate, you would need to consult industry surveys or job advertisements. This site cannot provide a median or employer-specific figure.

Enterprise Agreements

Some salary packaging companies may have an enterprise agreement that sets pay and conditions. An enterprise agreement must pass the better off overall test (BOOT) and cannot provide a base rate lower than the relevant award or the national minimum wage. If an agreement applies, it will set the minimum rate for that workplace.

How to Check Your Pay

To verify that your pay meets the legal minimum, start by identifying whether a modern award covers your role. If not, the national minimum wage applies. Compare your hourly or weekly rate (excluding super) to the relevant figure. Remember that juniors, apprentices, and trainees have lower rates. If you are casual, ensure the casual loading is included. For more detailed rate tables, visit the Rate tables page. If you need guidance on how the figures work, see How the figures work.

Summary

In summary, the legal minimum for employees of salary packaging companies in Australia is the national minimum wage of $26.44 per hour (from 1 July 2026), but a modern award or enterprise agreement may require a higher rate. Junior, apprentice, and trainee rates are lower. Super is paid on top. This information is for orientation only and is not a pay determination or legal advice. Always check your specific circumstances with the Fair Work Ombudsman or a qualified professional.