Salary Packaging Car Calculator: How Awards and the National Minimum Wage Affect Your Savings

What is a salary packaging car calculator?

A salary packaging car calculator is an online tool that estimates the net benefit of salary sacrificing a car through a novated lease. It takes your gross salary, the car's cost, and your tax situation to show how much you could save on tax and Fringe Benefits Tax (FBT). In Australia, salary packaging is common in the public and non-profit sectors, but many private employers also offer it. The calculator helps you compare the cost of buying a car out of post-tax income versus leasing it through your employer.

Awards versus the national minimum wage

The national minimum wage from 1 July 2026 is $26.44 per hour, or $1,004.90 per week, annualising to $52,255. That gives a salary index of 48.2 – less than half the national line of 100 (full-time adult ordinary-time earnings of $108,352). Most employees, however, are covered by a modern award or an enterprise agreement that sets a higher minimum. For example, the Retail trade industry has an index of 75.9, while Professional, scientific and technical services sits at 114.7. Award minima rose by 4.75% from 1 July 2026, with an entry-level floor of $25.74 per hour.

When you use a salary packaging car calculator, you enter your gross salary. That salary should be at least the award rate for your classification. If you are on the national minimum wage, your packaging options are limited because your cash pay cannot fall below the minimum. The calculator will show that packaging reduces your taxable income, but your employer must still pay you at least the minimum wage in cash or provide a benefit that meets the award's requirements.

How the salary index helps

The Salary Index compares your gross annual pay to the national line. If you earn $80,000 a year, your index is about 73.8. If you package a car, your gross salary for tax purposes drops, but your ordinary-time earnings for award purposes may stay the same. The index uses gross ordinary-time earnings, so packaging that reduces your gross salary could lower your index. However, the index is a benchmark, not a personal quote. Use it to see where your pay sits relative to the average.

Example: National minimum wage worker

Imagine you earn the national minimum wage of $52,255. Your index is 48.2. You consider a novated lease for a $30,000 car. The salary packaging car calculator estimates your tax saving based on your marginal tax rate (nil up to $18,200, then 15% to $45,000, 30% to $135,000). With a salary of $52,255, you are in the 30% bracket (plus 2% Medicare levy). Packaging reduces your taxable income by the lease payments, so you pay less tax. But your employer must ensure your remaining cash salary is at least the national minimum wage. The calculator will show the net benefit after FBT.

Example: Award-covered worker in retail

A retail employee covered by the General Retail Industry Award might earn $60,000 a year, index 55.4. The award rate is higher than the national minimum. Using a salary packaging car calculator, the employee can see how much they save. However, the award may have specific rules about salary packaging – some awards allow it, others require agreement. The calculator cannot account for every award condition, so check your pay guides or talk to your employer.

Tax and super considerations

Salary packaging reduces your taxable income, which can lower your Medicare levy and income tax. But it also reduces your super guarantee base if your employer calculates super on your ordinary time earnings (OTE). The super guarantee is 12% from 1 July 2026, up to a maximum contribution base of $270,830. If your packaging reduces your OTE, your super contributions may drop. The salary packaging car calculator typically includes super in its estimates, but check the assumptions.

State differences

Your location affects your pay index. For example, Western Australia has an index of 106.9, while Tasmania is 88.6. If you work in WA and earn above the national line, your packaging savings might be larger because you are in a higher tax bracket. The calculator uses your salary, not your state index, but the index gives context. See states for more.

Using the calculator wisely

A salary packaging car calculator is a tool, not a guarantee. It relies on your inputs and assumptions about FBT rates, lease terms, and your employer's policy. Always get a formal quote from your employer or a salary packaging provider. The calculator can help you decide whether packaging is worth it compared to buying the car outright.

Key takeaways

• The national minimum wage is at index 48.2; award rates are higher.
• A salary packaging car calculator estimates tax savings from novated leasing.
• Your award or agreement may limit how much you can package.
• The how the index works page explains the benchmark.
• For more on industry pay, see industries.