How salary sacrafice changes your fortnightly take-home pay

Your fortnightly take-home: what really changes it

When you look at your pay slip, the amount that lands in your bank account each fortnight is not just your salary divided by 26. Three big factors change it: the income tax brackets, the Medicare levy, and super contributions. And if you use a salary sacrafice arrangement, that can shift things further.

This guide explains how each piece works for the 2026–27 tax year, so you can understand what drives your take-home pay and whether salary sacrafice might be worth considering.

Tax brackets and the Medicare levy

Australia uses a progressive tax system. For 2026–27, the resident tax rates are:

• Up to $18,200: nil
• $18,201 to $45,000: 15c per $1 over $18,200
• $45,001 to $135,000: $4,020 plus 30c per $1 over $45,000
• $135,001 to $190,000: $31,020 plus 37c per $1 over $135,000
• Over $190,000: $51,370 plus 45c per $1 over $190,000

You also get the Low Income Tax Offset (LITO) – up to $700 if your taxable income is $37,500 or less, then it phases out. The Medicare levy adds another 2% on top of your tax, unless your income is below the single-person thresholds of $28,011 (lower) or $35,013 (upper). For most full-time workers, the full 2% applies.

So if you earn the national minimum wage of $26.44 per hour, or $1,004.90 per week ($52,255 per year), your taxable income is $52,255. Your tax would be about $4,020 plus 30c on the $7,255 above $45,000 – that's $2,176.50, total tax $6,196.50. Plus Medicare levy of $1,045.10. After tax and Medicare, your annual take-home is about $45,013.40, or roughly $1,731 per fortnight.

But that's before any salary sacrafice. If you salary sacrafice part of your pay, your taxable income drops, and so does your tax and Medicare levy.

Super contributions

Super is not deducted from your take-home pay if your salary is quoted as "plus super". From 1 July 2026, the super guarantee rate is 12% on your ordinary time earnings, up to a maximum contribution base of $270,830. Your employer pays this on top of your salary. If your salary is quoted as "including super", then the super component is taken out before you get your pay.

For most employees, super does not directly reduce your fortnightly bank deposit – it's an extra contribution to your retirement savings. But if you salary sacrafice into super, those contributions are made from your pre-tax salary, which lowers your taxable income and increases your super balance. The Australian Taxation Office notes that salary sacrificed super contributions are not fringe benefits, so your employer does not pay FBT on them.

Salary sacrafice explained

Salary sacrafice (or salary packaging) lets you swap some of your pre-tax salary for benefits like a car, laptop, or extra super. The Australian Taxation Office provides a clear example: an employee earning $65,000 who salary sacrafices a car benefit worth $17,353 (without employee contributions) sees their taxable income drop to $47,647. After tax and Medicare, their net disposable income is $41,611.96 – slightly less than the $41,912 they would have without packaging, because the employer may pass on FBT costs.

But if the employee makes an employee contribution of $7,000 to reduce the FBT, their taxable income is $60,855, and net disposable income rises to $43,593.40 – a better outcome. The key is that salary sacrafice works best when the benefit is something you would buy anyway, and when your employer offers a way to reduce FBT.

explains that common benefits include cars, phones, and childcare. There is no restriction on the types of benefits, but your employer decides what to offer. From 1 April 2027, work-related items provided through salary sacrafice will no longer be exempt from FBT, so check with your employer before setting up an arrangement.

What changes your fortnight

Your fortnightly take-home is the result of:

• Your gross salary per fortnight
• Minus income tax (calculated on your taxable income after any salary sacrafice)
• Minus Medicare levy (2% of taxable income, unless below thresholds)
• Plus any tax offsets like LITO
• Super is not subtracted if your salary is plus super

If you salary sacrafice, your taxable income falls, so your tax and Medicare levy fall too. But you also lose access to that cash – you receive the benefit instead. The net effect on your bank account depends on the type of benefit and any FBT implications.

For a quick estimate of your own numbers, use our Take-home pay calculator. It applies the 2026–27 rates and lets you add salary sacrafice amounts. Remember, this is an estimate, not a tax assessment.

Key things to watch

• Salary sacrafice must be arranged before you earn the income.
• It can affect government benefits, child support, and study loan repayments.
• The Medicare levy surcharge (if you earn over $93,000 as a single and don't have appropriate private hospital cover) is separate – salary sacrafice may reduce your income below the threshold.
• Always check with your employer or a tax professional before entering an arrangement.

Understanding these pieces helps you see why your fortnightly pay is what it is – and whether salary sacrafice could put more in your pocket (or into a benefit you need).

Check a figure

Use the clearance tool for a fortnightly take-home, then set it beside the national benchmarks.