Salary Packaging Meal Entertainment: State and Industry Differences in Australia

What is salary packaging meal entertainment?

Salary packaging meal entertainment is an arrangement where your employer provides or reimburses you for meals, drinks, and entertainment (such as restaurant meals, catering, or event tickets) as part of your total remuneration. Under Australian tax law, these benefits can be exempt from Fringe Benefits Tax (FBT) up to a certain cap, making them a tax-effective way to boost your take-home pay. It is most commonly offered by not-for-profit organisations, public hospitals, universities, and some government agencies.

Because the benefit is non-cash and does not alter your gross salary, it sits outside the ordinary-time earnings that the Salary Index measures. The index tracks gross weekly earnings before any packaging, so your index number stays the same whether or not you use salary packaging meal entertainment.

How salary packaging meal entertainment relates to the Salary Index

The Salary Index is a simple benchmark: your yearly gross ordinary-time earnings divided by the national line ($108,352) times 100. For example, a full-time worker earning $80,000 has an index of 73.8. Salary packaging meal entertainment does not change that figure because it is not part of gross earnings. However, it does improve your effective income after tax.

Consider a registered nurse in New South Wales (state index 101.2) earning $85,000 gross. If they salary package $5,000 in meal entertainment, their taxable income drops to $80,000. At the 30% marginal tax rate (plus 2% Medicare levy), they save about $1,600 in tax. Their index remains 85,000 ÷ 108,352 × 100 = 78.4, but their after-tax position is better than someone on the same gross without packaging.

State differences in salary packaging meal entertainment

State indices reflect average earnings, but they also hint at the types of employers and industries dominant in each state. The states page shows a wide range: ACT 109.9, WA 106.9, NSW 101.2, VIC 98, QLD 97.9, SA 94.6, NT 95.2, and TAS 88.6.

• ACT has the highest index and a large public sector workforce. The Australian Public Service and ACT government agencies often offer salary packaging meal entertainment. If you work in Canberra, you are more likely to have access to this benefit.
• Victoria and NSW have strong health and education sectors. Public hospitals and universities in these states commonly provide salary packaging meal entertainment to employees.
• Western Australia has a high index driven by mining, but mining companies rarely offer meal entertainment packaging. The benefit is more common in the state’s health and community services.
• Tasmania has the lowest index, but the not-for-profit sector is significant. Many Tasmanian charities and aged care providers offer salary packaging meal entertainment to attract staff.

State of residence does not directly affect the tax treatment of salary packaging meal entertainment—that is set by federal law. But the likelihood of your employer offering it varies by state because of the mix of industries.

Industry differences in salary packaging meal entertainment

Industry is a stronger predictor than state. The industries page lists indices that show where average earnings are high or low, but also where packaging is common.

• Health care and social assistance (index 97.8) is the biggest sector for salary packaging meal entertainment. Public hospitals, aged care homes, and disability services routinely offer it. A nurse or aged care worker can often package several thousand dollars a year in meal entertainment.
• Education and training (index 105.5) is another strong sector. Universities and some private schools offer salary packaging meal entertainment to academic and professional staff.
• Professional, scientific and technical services (index 114.7) includes many private firms that may offer packaging, but it is less standard than in health or education. It depends on the employer’s policy.
• Retail trade (index 75.9) and Accommodation and food services (index 72.5) rarely offer salary packaging meal entertainment. These industries have lower average pay and higher casual employment, making packaging less common.
• Mining (index 154.7) pays well but typically does not offer meal entertainment packaging. Instead, miners may get other benefits like housing or vehicle allowances.

Tax and super considerations

Salary packaging meal entertainment reduces your taxable income, which can lower the tax you pay. For the 2026–27 year, resident tax rates (excluding Medicare) are: nil up to $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 that. The Medicare levy adds 2%.

Importantly, superannuation guarantee contributions are based on your gross salary, not your packaged amount. From 1 July 2026, the super guarantee is 12% on gross ordinary-time earnings up to the maximum contribution base ($270,830). So if you earn $100,000 and package $5,000 in meal entertainment, your employer still pays $12,000 into your super fund. This is a major advantage: you get the tax saving on the packaged amount while maintaining full super contributions.

Practical example

Let’s put it together with a concrete example. A social worker in Queensland (state index 97.9) earns $75,000 gross. Their employer, a not-for-profit community organisation, offers salary packaging meal entertainment up to $5,000 per year. The worker chooses to package the full amount.

• Gross salary: $75,000 → index 69.2
• Taxable income after packaging: $70,000
• Tax estimate (2026–27): $4,092 on first $45,000 (15% of $26,800) + $7,500 on next $25,000 (30%) = $11,592, plus Medicare levy $1,400 (2% of $70,000) = $12,992 total tax. Without packaging, tax on $75,000 would be $4,092 + $9,000 (30% of $30,000) = $13,092 + Medicare $1,500 = $14,592. Saving: $1,600.
• Super: 12% of $75,000 = $9,000 (unchanged).

This worker’s index stays at 69.2, but their take-home pay is higher than a colleague on the same gross without packaging.

Conclusion

Salary packaging meal entertainment is a valuable tool for boosting your after-tax income, especially if you work in health, education, or the not-for-profit sector. It does not change your Salary Index number because the index uses gross earnings. State and industry differences affect how likely you are to have access to this benefit, with the ACT and Victoria leading in public sector and health jobs, and industries like retail and accommodation offering it rarely. For more on how the index works, see how the index works. To explore pay by location, visit the states page. For industry-specific guides, check industries.