Salary Sacrifice Flights and the Australian Minimum Wage: What You Need to Know

Salary Sacrifice Flights and the Legal Pay Floor

When you hear about salary sacrifice flights, you might wonder how this benefit fits with Australia's minimum wage laws. Salary sacrifice is an arrangement where you agree to forgo part of your salary in exchange for a non-cash benefit, such as flights. This can reduce your taxable income, but it does not change the fundamental obligation your employer has to pay you at least the legal minimum wage.

The National Minimum Wage

The Fair Work Commission sets the national minimum wage. From 1 July 2026, the adult rate is $26.44 per hour or $1,004.90 per week for a 38‑hour week. Casual employees receive a loading of 25%, making the casual rate $33.05 per hour. These figures apply to award‑free and agreement‑free national‑system employees. Your employer must pay you at least this amount in cash or as a combination of cash and benefits that meet the minimum wage test. Salary sacrifice flights are a benefit, but they cannot reduce the cash component below the minimum wage.

Award Rates and Enterprise Agreements

Many employees are covered by a modern award or an enterprise agreement. Awards set minimum wages for specific industries and occupations. From the first full pay period on or after 1 July 2026, award minimum wages rise by 4.75%, but the lowest ongoing classification cannot fall below the national minimum. Introductory rates (first six months) are capped at $25.74 per hour or $978.10 per week. If your award or agreement specifies a higher rate, that rate applies instead of the national minimum. Salary sacrifice flights do not allow your employer to pay below the award rate.

Separating the Legal Minimum from Other Figures

It is important to distinguish the legal floor from other benchmarks:

• Legal minimum: The national minimum wage or applicable award rate.
• Survey average: The ABS reports that full‑time adult ordinary‑time earnings were $2,083.70 per week in May 2026. This is an average, not a minimum.
• Negotiated salary: Your individual contract may set a higher rate, but it cannot be lower than the legal floor.

Salary sacrifice flights are a negotiated benefit, not a substitute for the minimum wage. The reference does not provide a market rate for such flights, so we cannot give a precise figure.

Superannuation Guarantee

On top of your pay, your employer must contribute superannuation at 12% of your ordinary time earnings. If you salary sacrifice flights, your ordinary time earnings are reduced, which may lower the super contribution base. However, the ATO has rules to prevent employers from using salary sacrifice to reduce super obligations unfairly. Always check with the ATO or a qualified adviser.

Who Is Covered?

These national rates apply to most private‑sector employees 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. If you are award‑free and agreement‑free, the national minimum wage is your floor. A modern award or enterprise agreement can require a higher rate. Apprentice and trainee rates for award‑free employees follow the Miscellaneous Award, not the junior percentages.

Important Cautions

• Juniors, apprentices, trainees: Lower rates may apply. For example, award‑free juniors under 16 receive 36.8% of the adult rate ($9.73 per hour).
• Salary sacrifice flights do not reduce minimum wage obligations: Your employer must still pay at least the legal floor in cash or equivalent.
• This site is not a pay determination: The information here is for orientation only. For your specific situation, consult the Fair Work Ombudsman or a workplace relations professional.

For more details, see Which minimum wage applies and our Guides section.

Frequently Asked Questions

Can my employer count salary sacrifice flights towards my minimum wage?

No. The Fair Work Ombudsman states that salary sacrifice arrangements cannot reduce your minimum wage entitlement. You must still receive at least the national minimum wage or the applicable award rate in cash or as a benefit that meets the minimum wage test. Salary sacrifice flights are a pre‑tax deduction, not a substitute for the minimum wage.

Does salary sacrifice affect my super guarantee?

Yes, but only on the reduced ordinary time earnings. The super guarantee is 12% of your ordinary time earnings (the salary after salary sacrifice). However, the employer must still pay super on the amount that would have been earned without salary sacrifice if the arrangement is a 'salary sacrifice' under ATO rules. Check with the ATO for specific guidance.

If I salary sacrifice flights, do I still get the national minimum wage increase on 1 July 2026?

Yes. The national minimum wage increase to $26.44 per hour applies regardless of any salary sacrifice arrangement. Your employer must ensure that your total remuneration (cash plus any non‑cash benefits) meets or exceeds the minimum wage. Salary sacrifice flights do not exempt your employer from paying at least the legal floor.

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