How to negotiate a salary package: Know your take-home pay and benchmarks

How to negotiate a salary package: What you need to know

When you sit down to negotiate a salary package, the number on the offer letter is only part of the story. What actually reaches your bank account each fortnight is your take-home pay after income tax and the Medicare levy. Understanding that figure, and how it compares to Australian benchmarks, gives you a stronger position at the negotiation table.

Start with the national minimum wage

Fair Work sets the National Minimum Wage at $26.44 per hour or $1,004.90 per week for employees not covered by an award or agreement. This is the legal floor. If your offer is below this, it is not lawful. Most roles pay above the minimum, but it is a useful anchor. For full-time work, the average full-time adult ordinary time earnings is $2,083.70 per week, according to the Australian Bureau of Statistics. That figure excludes overtime and employer super, so it is a solid reference point for a typical full-time salary.

Calculate your take-home pay

Your take-home pay depends on your taxable income, the tax brackets for 2026–27, and the Medicare levy. The first $18,200 you earn is tax-free. Then:

• $18,201 to $45,000: 15c for each dollar over $18,200
• $45,001 to $135,000: $4,020 plus 30c for each dollar over $45,000
• $135,001 to $190,000: $31,020 plus 37c for each dollar over $135,000
• $190,001 and over: $51,370 plus 45c for each dollar over $190,000

Add the Medicare levy of 2% on your taxable income, unless you are below the low-income thresholds ($28,011 single, reduced rate up to $35,013). You may also be eligible for the Low Income Tax Offset (LITO), which can reduce your tax bill.

For example, if your salary is $80,000, your tax (excluding Medicare) would be $4,020 plus 30c on the $35,000 above $45,000 = $4,020 + $10,500 = $14,520. Medicare levy adds $1,600 (2% of $80,000), so total deductions $16,120, leaving take-home pay of $63,880 per year, or about $2,457 per fortnight.

Use our Take-home pay calculator to estimate your own figure. Remember, this is an estimate and does not include HELP/HECS repayments, the Medicare levy surcharge, or salary sacrifice.

Factor in superannuation

From 1 July 2026, your employer must pay super at 12% of your ordinary time earnings, up to a maximum contribution base of $270,830. Job advertisements often state a salary "plus super". That means the advertised figure is your base salary, and super is on top. When you learn how to negotiate a salary package, always clarify whether the figure is inclusive or exclusive of super. Super is not deducted from your take-home pay; it goes into your super fund.

Use benchmarks to strengthen your case

Knowing where your offer sits against the Minimum wage and the full-time ordinary time average helps you argue for a fair package. If your offer is below the average for your role and experience, you can point to market data. The Australian Bureau of Statistics publishes average weekly earnings by industry and state. Also consider industry-specific salary guides from professional bodies.

Consider salary packaging

Salary packaging (or salary sacrificing) lets you swap some salary for benefits like a car, laptop, or additional super contributions. This reduces your taxable income, so you pay less tax and Medicare levy. However, the benefits themselves may have fringe benefits tax implications. Check with your employer and the Australian Taxation Office rules. Our Salary packaging guide explains common options.

Negotiate the total package

When you understand how to negotiate a salary package, you look beyond the base number. Consider:

• Superannuation rate (some employers offer above the 12% minimum)
• Performance bonuses or commission
• Leave entitlements (annual leave, personal leave, long service leave)
• Flexible work arrangements
• Professional development allowances
• Salary packaging options

A slightly lower base salary with strong super and benefits can sometimes be better than a higher base with minimal extras.

Know your tax position

The Australian Taxation Office provides tax tables and calculators to help you estimate withholding. Your employer uses your Tax File Number declaration to determine how much tax to take out each pay. If you have a HELP debt or other study loans, additional withholding applies. The Medicare levy surcharge may also apply if you do not have appropriate private hospital cover and your income exceeds certain thresholds.

For a detailed breakdown of how tax and Medicare affect your pay, see our Tax and Medicare page.

Final tips for negotiation

• Research the market rate for your role using the ABS and industry guides.
• Know your minimum acceptable take-home pay after tax and Medicare.
• Be prepared to discuss total remuneration, not just salary.
• Get the offer in writing, including super and any benefits.
• Use our Clearance tool to check if a proposed package meets your needs.

Negotiating a salary package is about more than the headline number. By understanding your take-home pay, the benchmarks, and the full range of benefits, you can make an informed decision and secure a package that works for you.