How to find the best salary sacrifice car deal when comparing job offers

What is a salary sacrifice car?

When you see a job ad that mentions a "salary sacrifice car" or "novated lease", it means you can pay for a car using pre-tax dollars. Instead of receiving your full salary and then buying a car with after-tax money, you agree to reduce your salary by the cost of the car (or lease payments). Your employer then provides the car or pays the lease. This lowers your taxable income, so you pay less tax. The catch is that the car benefit may be subject to fringe benefits tax (FBT), but many employers structure it as a novated lease to minimise FBT.

How to compare job offers with a salary sacrifice car

When you're reading a job ad and comparing offers, the key is to look at the total remuneration package, not just the base salary. The Salary Index is a useful tool for this. The national index of 100 equals full-time adult ordinary-time earnings of $108,352 per year (from ABS Average Weekly Earnings, May 2026). If an offer includes a salary sacrifice car, you need to estimate the pre-tax value of that car and add it to the base salary.

Example: Two offers in different states

Offer A: Base salary $95,000 in Victoria, with a salary sacrifice car worth $12,000 per year pre-tax. Total remuneration = $107,000. Victoria's state index is 98 ($106,137 annualised). So $107,000 / $106,137 * 100 = index about 100.8 – slightly above the Victorian average.

Offer B: Base salary $100,000 in Western Australia, no car benefit. WA index is 106.9 ($115,825). $100,000 / $115,825 * 100 = index 86.3 – well below the WA average.

Even though Offer B has a higher base salary, Offer A may be better when you factor in the car and the cost of living. But you also need to consider tax.

Tax implications of salary sacrifice cars

Salary sacrifice reduces your taxable income, which can lower your marginal tax rate. For 2026-27, the tax brackets are: nil up to $18,200; 15% to $45,000; 30% to $135,000; 37% to $190,000; 45% above. Plus a 2% Medicare levy. If your base salary is $120,000, you're in the 37% bracket. Sacrificing $15,000 for a car brings your taxable income to $105,000, which is still in the 37% bracket, but you save $5,550 in tax (37% of $15,000) plus the Medicare levy. If you were close to the $135,000 threshold, sacrificing enough could drop you into the 30% bracket, saving even more.

However, salary sacrifice reduces the base for your super guarantee. From 1 July 2026, the super guarantee is 12% of your ordinary time earnings, but if you salary sacrifice, your employer may calculate super on the reduced salary. Some employers allow you to salary sacrifice into super as well, but that's a separate decision. Check your employer's policy.

Using the index to compare across industries and states

The Salary Index provides benchmarks for different industries and states. For example, the Mining industry index is 154.7, while Retail trade is 75.9. If you're comparing a job in mining with a salary sacrifice car versus a retail job without, the index helps you see the relative value. Similarly, state indices adjust for regional pay differences. An offer in the ACT (index 109.9) might look lower than one in Tasmania (index 88.6) even if the dollar amount is the same, because the cost of living is higher in the ACT.

Practical steps when reading a job ad

1. Identify if the ad mentions salary sacrifice for a car. Look for phrases like "novated lease", "salary packaging", or "car allowance".
2. Ask the employer for the pre-tax cost of the car benefit. If it's a novated lease, they can give you the annual lease payment.
3. Add that to the base salary to get total remuneration.
4. Compare that total to the relevant state and industry index using the states page.
5. Consider your tax bracket and how the sacrifice affects your take-home pay. Use the how the index works page to calculate your effective index.

Caveats and fine print

Salary sacrifice for a car is not always the best option. FBT can apply if the car is used for personal purposes more than a certain amount. Many employers use the statutory formula method to calculate FBT, which can be favourable. Also, if you leave the job, you may be liable for the remaining lease payments. Always read the fine print and consult a tax professional.

The index figures in this article are gross ordinary-time benchmarks from the ABS. They are not a quote for a specific job or person. Take-home pay estimates ignore HELP repayments, the Medicare levy surcharge, and other deductions. Modern awards may set higher minimum pay than the national minimum wage.

Final thoughts

The best salary sacrifice car deal depends on your personal tax situation, the employer's policy, and the total remuneration package. Use the Salary Index as a starting point to compare offers on a level playing field. Remember that a car benefit is not cash – you are trading salary for a car. Make sure the car is something you actually need and that the total package is competitive against the market. For more guidance, see our topics page on salary packaging.