What Is Salary Sacrificing and How Does It Affect Your Take-Home Pay?
Our calculator converts an hourly rate to annual pay based on 38 hours per week × 52 weeks, with super and tax estimated on that gross figure.
What Is Salary Sacrificing?
Salary sacrificing, also known as salary packaging, is a formal arrangement between you and your employer where you agree to give up part of your pre-tax salary in exchange for benefits of similar value. Common benefits include extra super contributions, a car, childcare costs, or work-related items. Because the sacrificed amount is not counted as assessable income, you pay less income tax. However, your employer may have to pay fringe benefits tax (FBT) on certain benefits.
According to the Australian Taxation Office, for a salary sacrifice arrangement to be effective, you must enter into it before you perform the work, have a written agreement, and not be able to access the sacrificed salary. Salary-sacrificed super contributions are treated as employer contributions and are not subject to FBT if made to a complying super fund.
How Salary Sacrificing Affects Your Pay Calculation
Our calculator at the timesheet converts an hourly rate into annual, fortnightly, and weekly figures. It assumes you work 38 hours per week for 52 weeks, with no unpaid overtime, penalty rates, allowances, or salary sacrifice. The formula is simple: annual gross ≈ hourly rate × hours per week × 52. For example, at the National Minimum Wage of $26.44 per hour (from 1 July 2026), the annual gross is $26.44 × 38 × 52 = $52,245.44. Super is estimated at 12% of ordinary earnings paid on top, and tax uses the 2026–27 resident rates with the full tax-free threshold.
If you salary sacrifice, your taxable income is lower than this gross figure, so your tax estimate from our calculator would be too high. Similarly, your super estimate may be too low if you sacrifice additional amounts into super. That is why we clearly state that salary packaging is not deducted in our estimates.
Key Differences in Ordinary-Time Earnings
Ordinary-time earnings are the base pay for standard hours (usually 38 per week). They do not include overtime, penalty rates, or allowances. The Fair Work Ombudsman sets the National Minimum Wage and award rates for specific industries. As of 1 July 2026, the minimum wage is $26.44 per hour, or $1,004.90 per week for 38 hours. Casual employees receive a 25% loading, making the casual minimum $33.05 per hour. Award rates may be higher than the minimum and vary by classification.
The Australian Bureau of Statistics reports Average Weekly Earnings for full-time adult ordinary time at $2,083.70 per week (May 2026). This figure includes salary sacrificing arrangements, so it reflects the total remuneration package before sacrifice. All employees total earnings (including part-time) average $1,579.20 per week.
When you use our calculator, you can select a base hourly rate. If you are a casual employee, check the casual loading checkbox to add 25% on top. Do not enter a rate that already includes casual loading. The calculator then shows your gross annual pay, fortnightly pay (weekly × 2), estimated super (12% on ordinary earnings up to the $270,830 maximum contribution base), and estimated tax and Medicare levy.
Tax and Super Considerations
Resident tax rates for 2026–27 are: nil on the first $18,200; 15% from $18,201 to $45,000; 30% from $45,001 to $135,000; 37% from $135,001 to $190,000; and 45% above $190,000. The Medicare levy is generally 2% of taxable income. Our calculator uses the 2025–26 single reduction thresholds because the 2026–27 thresholds were not confirmed at the time of this estimate.
Super guarantee is 12% of ordinary earnings, paid on top of your salary. It stops when your earnings exceed the maximum contribution base of $270,830 per year. Salary-sacrificed super contributions count towards your concessional contributions cap ($32,500 per year for 2026–27). If you exceed the cap, you may pay extra tax. Also, if your combined income and concessional contributions exceed $250,000, Division 293 tax may apply.
Using Our Calculator with Salary Sacrificing in Mind
Our calculator is a starting point. It gives you a clear picture of your gross pay, super, and tax without salary sacrificing. To see how salary sacrificing might change your numbers, you can manually reduce your hourly rate by the sacrificed amount (but remember that super guarantee is still calculated on your ordinary-time earnings, not the reduced rate). For example, if you earn $50 per hour and sacrifice $5 per hour into super, your taxable hourly rate becomes $45, but your super guarantee is still based on $50 per hour. Our calculator cannot model this complexity, so we recommend using super and packaging resources and consulting a tax professional.
For more details on minimum wages, award rates, and casual loading, see our minimum wage and casual loading pages. To understand how tax and Medicare affect your take-home pay, visit take-home pay.
Important Disclaimer
Annual pay shown here is hourly rate × hours per week × 52. It assumes the same rate every week, no unpaid overtime, no penalty rates, no allowances, and no salary sacrifice. Super is estimated at 12% of ordinary earnings only, paid on top, and stops at the $270,830 maximum contribution base. Tax is the 2026–27 resident scale with the full tax-free threshold. Medicare uses the 2025–26 single reduction thresholds because the 2026–27 reduction thresholds were not confirmed here. HELP, the Medicare levy surcharge, and salary packaging are not deducted. This is an estimate, not a determination of your pay or tax.
Open the same rate on the home timesheet. Read the reference tables before treating a figure as your pay.