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Salary packaging not for profit: Where your pay sits on the Australian salary index
Learn how salary packaging not for profit affects your salary index. See where NFP workers' gross pay compares to the national line, and how packaging changes take-home pay.
Not-for-profit workers in health and social assistance typically earn below the national line (index 97.8), while those in education are above (105.5); salary packaging does not change the gross index but boosts take-home pay.
What is salary packaging for not-for-profit?
Salary packaging, also known as salary sacrifice, is an arrangement where you agree to forgo part of your salary in exchange for benefits such as a car, car parking, or mortgage payments. For not-for-profit (NFP) employees, the Australian Tax Office allows certain fringe benefits exemptions that can make packaging more attractive. Common caps are $15,900 for general NFP and $30,000 for hospitals and public benevolent institutions. This means you can reduce your taxable income, paying less tax and increasing your take-home pay.
How salary packaging affects your salary index
The Salary Index measures gross ordinary-time earnings before any packaging. The national line is 100, set at $108,352 per year (based on ABS Average Weekly Earnings, May 2026). Your gross salary determines your index. For example, a gross salary of $80,000 gives an index of 73.8, well below the national line. Salary packaging does not change this gross figure, so your index remains the same. However, your take-home pay can be significantly higher than someone earning the same gross salary without packaging.
Industry examples for NFP workers
Not-for-profit workers are spread across several industries. The industries page shows benchmarks for health care and social assistance (index 97.8) and education and training (index 105.5). A nurse in a public hospital earning $85,000 gross (index 97.8) is just below the national line. With packaging, their take-home pay can match someone earning $100,000 gross. Education workers often earn above the line, with an index of 105.5, but packaging still boosts their after-tax income.
State comparisons for NFP roles
State indices vary. For example, ACT has an index of 109.9, while Tasmania is 88.6. If you work for an NFP in Tasmania, your gross salary is likely lower relative to the national line. Salary packaging can help bridge the gap in take-home terms. Use the states page to see how your state compares.
Concrete example: an NFP employee in Victoria
Consider a community worker in Victoria earning $70,000 gross. The Victoria index is 98, so $70,000 is about 64.6 on the index. After packaging $15,900, their taxable income drops to $54,100, saving about $4,770 in tax and Medicare. Their take-home pay is equivalent to someone earning $78,000 gross without packaging.
Tax and super considerations
Salary packaging reduces your taxable income, which also affects your super guarantee contributions? No, super is calculated on your gross salary before packaging. The super guarantee is 12% from 1 July 2026, up to a maximum contribution base of $270,830. So packaging does not reduce your super. However, you may also choose to salary sacrifice additional super contributions, which can further reduce tax.
How to use the salary index with packaging
To compare your pay, first find your gross salary index by dividing your gross annualised ordinary-time earnings by $108,352 and multiplying by 100. Then consider your take-home pay after packaging. Use the how the index works page to understand the calculation. Remember that the index is a benchmark, not a quote for a person or award classification.
Conclusion
Salary packaging not for profit is a valuable benefit for NFP workers, but it does not change your salary index. Your gross pay sits on the index is based on your gross earnings before packaging. Use the salary index to see where you stand, then factor in packaging to see your true take-home pay.
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Questions people ask
What is salary packaging for not-for-profit employees?
Salary packaging allows you to use pre-tax income to pay for certain expenses, reducing your taxable income. For not-for-profit organisations, there are FBT exemptions that can make packaging more beneficial, such as up to $15,900 tax-free fringe benefits per year for public benevolent institutions.
Does salary packaging affect my salary index?
No, the salary index is based on gross ordinary-time earnings before any packaging. Your index value remains the same regardless of packaging. For example, a gross salary of $80,000 gives an index of 73.8, even if you package $15,900.
How do I compare my pay if I use salary packaging?
Compare your gross salary to the national line (index 100 = $108,352). Then consider your take-home pay after packaging. A gross salary of $80,000 (index 73.8) might have a take-home equivalent of a higher gross salary due to tax savings. Use the [how the index works](/method) page to understand the calculation.