Salary packaging meal entertainment and the minimum wage: what you need to know

Salary packaging meal entertainment and the minimum wage

If you are looking into salary packaging meal entertainment, you are probably wondering how it affects your take-home pay and whether it changes the minimum wage you must receive. This guide explains the legal pay floor in Australia and how salary packaging fits alongside it.

What is salary packaging meal entertainment?

Salary packaging (also called salary sacrificing) is an arrangement where you agree to forgo part of your pre-tax salary in return for a benefit provided by your employer. Meal entertainment covers things like restaurant meals, entertainment venue tickets, and holiday accommodation when provided by your employer. For many employees, especially those in the not-for-profit sector, salary packaging meal entertainment can reduce taxable income. However, it is important to understand that salary packaging is a tax arrangement, not a wage-setting mechanism.

The legal minimum wage: your starting point

The Fair Work Commission sets the national minimum wage. From the first full pay period on or after 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 rate $33.05 per hour. These figures apply to national-system employees who are award-free and agreement-free.

If you are covered by a modern award, the award contains its own minimum rates. The lowest ongoing classification in any award cannot fall below the national minimum. Some awards also have introductory rates (for the first six months) of $25.74 per hour or $978.10 per week. Junior employees, apprentices, and trainees may receive lower rates under specific rules.

Your employer must pay you at least the applicable minimum wage before any salary packaging arrangement. Salary packaging meal entertainment does not reduce this obligation. The total value of your salary package (cash plus benefits) must meet or exceed the minimum wage.

How salary packaging interacts with the minimum wage

Salary packaging meal entertainment is a voluntary agreement. You choose to sacrifice part of your salary in exchange for a benefit. The sacrificed amount is not paid as cash, but it still counts towards your total remuneration for minimum wage purposes. In other words, if your award rate is $26.44 per hour, your employer can provide part of that as meal entertainment benefits, as long as the combined cash and benefits equal at least $26.44 per hour. However, many employers prefer to keep the minimum wage as cash to avoid compliance risks.

It is also important to note that salary packaging does not change the superannuation guarantee. Your employer must pay 12% super on your ordinary time earnings, which includes the salary sacrificed amount. So salary packaging meal entertainment does not reduce the super your employer must contribute.

Separating the legal minimum from other figures

• Legal minimum: Set by the Fair Work Commission. For award-free adults, $26.44 per hour.
• Award rate: A higher rate may apply under a modern award. Check your award classification.
• Enterprise agreement: A registered agreement can set rates above the award or national minimum.
• Survey averages: The ABS reports average full-time adult ordinary-time earnings of $2,083.70 per week (May 2026). This is a market average, not a legal floor. Many employees earn more than the minimum.
• Negotiated salary: Your individual contract may specify a rate above the minimum. Salary packaging can be part of that negotiation.

What about juniors, apprentices, and trainees?

If you are under 21 and award-free, junior percentage rates apply. For example, a 19-year-old award-free employee must receive at least $21.82 per hour (82.5% of the adult rate). Salary packaging meal entertainment can still be used, but the total package must meet the junior minimum. Apprentices and trainees have their own rates under the Miscellaneous Award.

Practical check: comparing your hourly rate

To see if your pay meets the legal floor, calculate your total hourly remuneration including any salary packaged benefits. Divide your total weekly cash plus the value of benefits (excluding super) by your ordinary hours. If the result is below $26.44 (or your applicable award rate), your employer may be underpaying you. Remember, super is paid on top and does not count towards the minimum wage.

Internal resources

• Which minimum wage applies – Find out if you are covered by an award or the national minimum.
• Rate tables – See current award and national minimum rates.

Summary

Salary packaging meal entertainment is a useful tax strategy, but it does not change the fundamental obligation to pay at least the minimum wage. Always check your award or the national minimum wage to ensure your total package meets the legal floor. If you are unsure, speak to your employer or contact the Fair Work Ombudsman for guidance.

Frequently asked questions

Can my employer pay me less than the minimum wage if I have salary packaging?

No. Salary packaging meal entertainment is a voluntary arrangement between you and your employer to sacrifice part of your salary in exchange for a benefit. It does not change the legal minimum wage that must be paid for the work you perform. Your employer must still pay at least the applicable minimum wage (national minimum wage, award rate, or enterprise agreement rate) in cash or as a combination of cash and benefits, but the total value of the package cannot fall below the minimum wage entitlement.

Does salary packaging meal entertainment affect my super guarantee?

No, it does not reduce your employer's superannuation guarantee obligation. Super guarantee is calculated on your ordinary time earnings, which includes any salary sacrificed amounts. So even if you salary package meal entertainment, your employer must still pay the 12% super contribution on top of your ordinary time earnings, not on the reduced taxable income.

What is the difference between salary packaging and an award rate?

Salary packaging is a tax-effective way to receive benefits such as meal entertainment in exchange for a reduction in your pre-tax salary. An award rate is a minimum wage set by the Fair Work Commission for a particular industry or occupation. You must be paid at least the award rate regardless of any salary packaging arrangement. Salary packaging cannot bring your total remuneration below the award rate or the national minimum wage, whichever is higher.

For the published floors, see the rate tables and how the figures work.