How does salary packaging affect my take-home pay?

Salary packaging allows you to sacrifice part of your award salary for benefits such as meal cards, novated leases, or superannuation. Under the NSW Health salary packaging scheme, the fringe benefits tax (FBT) exemption cap is $17,000 per year (grossed-up), which corresponds to an actual benefit value of about $9,009. Any packaging above that cap may incur FBT, which the employer may pass on to you. Your take-home pay reduces by the packaged amount, but you save tax on that portion. Your award salary remains the same for calculating super and other entitlements.

Is super calculated on my packaged salary or my award salary?

Super is calculated on your award salary, not the packaged amount. The NSW Health Professionals and Support Services Award (State) states that salary for superannuation purposes is the award salary as specified in the salaries clause, which includes the value of packaged benefits. The super guarantee is 12% of ordinary time earnings, and your employer must pay super on the full award salary even if you salary package a portion.

Salary Packaging NSW Health: Understanding Your Pay Floor and Award Rates

Q: What is the minimum wage for NSW Health professionals?

The national minimum wage is $26.44 per hour from 1 July 2026, but NSW Health employees are covered by the Health Professionals and Support Services Award (State). That award sets higher minimum rates that vary by classification and experience. For example, under the federal Health Professionals and Support Services Award 2020, a Level 1 employee with an AQF Level 5 qualification starts at $32.44 per hour, but NSW Health uses the state award which has its own rates. The state award rates increased by 4% from 1 July 2025 and will increase by another 4% from 1 July 2026.

The national minimum wage is $26.44/h, but NSW Health professionals are covered by a state award with higher rates; salary packaging can reduce taxable income but does not affect the award entitlement.

Salary Packaging NSW Health: The Pay Floor and Award Rates

If you work in the New South Wales public health system, you may have heard about salary packaging NSW health as a way to reduce your tax. But before you consider packaging, it is important to know the minimum pay that applies to you. This guide explains the legal minimum wage, the award rates for health professionals, and how salary packaging fits in.

The National Minimum Wage

From 1 July 2026, the national minimum wage is $26.44 per hour, or $1,004.90 per week for a 38‑hour week. Casual employees receive a 25% loading, making the casual minimum $33.05 per hour. This floor applies to award‑free and agreement‑free employees in the national system. However, most NSW Health employees are covered by a state award that sets higher rates.

The State Award for NSW Health Professionals

NSW Health employees are covered by the Health Professionals and Support Services Award (State). This award sets minimum salaries in Table 1 of Part B. The award took effect on 1 July 2025 and runs for two years. Rates increased by 4% from the first full pay period on or after 1 July 2025, and will increase by another 4% from the first full pay period on or after 1 July 2026. The exact dollar figures are not reproduced here, but they are significantly higher than the national minimum. For example, under the federal Health Professionals and Support Services Award 2020 (which applies to national‑system employees), a Level 1 employee with an AQF Level 5 qualification in their first year earns $32.44 per hour. The NSW state award rates are comparable or higher.

How Salary Packaging Works

Under clause 6 of the state award, employees may agree with their employer to package part or all of their salary. The combined amount of salary sacrifice to superannuation and salary packaging can be up to 100% of the award salary. The scheme uses a fringe benefits tax (FBT) exemption status that applies to public hospital employees. The FBT exemption cap is $17,000 per year (grossed‑up), which means the actual value of benefits you can package without FBT is about $9,009. If you exceed that cap, the employer may pass the FBT cost on to you. The tax savings from packaging are shared 50/50 between you and the health agency, after deducting an administration fee.

Superannuation and Salary Packaging

Your super guarantee is calculated on your award salary, not the packaged amount. The award defines salary for super purposes as the award salary including the value of packaged benefits. The super guarantee is 12% of ordinary time earnings, and your employer must pay this on top of your award salary. Salary packaging does not reduce the super you receive.

Comparison with the Federal Award

If you are a national‑system employee (most private‑sector workers), the Fair Work Ombudsman’s Health Professionals and Support Services Award 2020 (MA000027) applies. That award has minimum rates for health professional levels. For instance, a Level 1 employee with an AQF Level 5 qualification in their first year earns $32.44 per hour, rising to $40.56 per hour after seven years. But NSW Health employees are in the state public sector and covered by the state award, which may have different rates. Always check your employment contract and the applicable award.

Key Takeaways

Your legal minimum is the rate in the NSW Health Professionals and Support Services Award (State), not the national minimum.
Salary packaging can reduce your taxable income, but it does not change your award salary for super or other entitlements.
The FBT exemption cap is $17,000 grossed‑up (actual value ~$9,009).
Super is 12% on top of your award salary.

For more details on which minimum wage applies to you, see our Which minimum wage applies guide. You can also browse Rate tables for national minimum and award rates.

Sources

The information in this article is based on the NSW Health Professionals and Support Services Award (State) , the Fair Work Ombudsman’s Health Professionals and Support Services Award 2020 , and the NSW Health Policy Directive PD2018_044 on Salary Packaging .

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