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Salary Packaging WA: How It Affects Your Pay on the Salary Index
Learn how salary packaging in Western Australia interacts with the national salary index. WA's index of 106.9 means above-average gross earnings, but packaging changes your taxable
Salary packaging does not change your gross ordinary-time earnings, so your position on the salary index remains based on your pre-sacrifice salary. For WA, the state index is 106.9, indicating typical gross earnings of $115,825 annually.
Salary Packaging WA: Where Your Pay Sits on the National Line
Salary packaging is an arrangement where you agree to forgo part of your salary in exchange for benefits such as a car, super contributions, or electronic devices. In Western Australia, salary packaging is especially common in the mining and resources sector, as well as in public and not-for-profit organisations. But where does a packaged salary sit on the Australian salary index? The index measures your gross ordinary-time earnings before any sacrifice, so your index position is based on the full salary you earn, not the reduced taxable amount.
How the Salary Index Works for WA
The national line is set at 100, which equals $108,352 per year (based on ABS Average Weekly Earnings of $2,083.70 per week). Western Australia’s state index is 106.9, meaning typical gross ordinary-time earnings in WA are $115,825 annually. This is above the national average, reflecting WA’s strong mining and resources economy. If you earn a salary that matches that figure, your index is 106.9 regardless of how much you package.
Does Salary Packaging Change Your Index?
No. The index uses your gross ordinary-time earnings before any salary sacrifice. For example, if you earn $115,825 and package $15,000 into super, your gross earnings are still $115,825. Your index remains 106.9. However, your taxable income drops to $100,825, which can lower your tax bill. This is important when comparing job offers: always look at the gross figure to see where it sits on the Salary Index.
Tax Implications of Salary Packaging in WA
Because WA’s gross earnings are higher, you are likely in a higher marginal tax bracket. For 2026–27, the tax rates are: nil up to $18,200, then 15% up to $45,000, then 30% up to $135,000, then 37% up to $190,000. On a gross of $115,000, you are in the 30% bracket. Every dollar you package saves you 30 cents in tax plus the 2% Medicare levy. That’s more valuable than someone in a lower-index states like Tasmania (index 88.6) where gross is $96,008, so you are in the 15% bracket. Packaging is more effective in WA.
Common Packaging Benefits in WA
Popular items include novated leases (car leases through salary sacrifice) are very common in WA’s mining towns. Other benefits include super contributions, electronic devices, and, for not-for-profit employees, fringe benefits like meal cards or entertainment. Each has different tax treatment under ATO rules. Check your specific arrangement with your employer or a tax professional. For more on how different industries compare, see [industries](/industries] and [states](/states].
Take-Home Pay Example
If you earn the WA typical gross of $115,825, your gross per week is $2,083.70. After tax (excluding HELP, salary sacrifice, Medicare levy reduction, and Medicare levy surcharge) your take-home pay is about $1,500 per week (rough estimate). That’s a resident estimate with tax-free threshold and flat 2% Medicare levy. Your actual take-home will be higher because of the packaging. But your index is still 106.9.
Conclusion
Salary packaging does not change your index position. It changes your taxable income. In WA, the higher index means packaging is more valuable. Always compare gross salaries before packaging. For more on how the index works, see [how the index works](/method].
FAQs
Does salary packaging affect my salary index ranking? No. The salary index is calculated using your gross ordinary-time earnings before any salary sacrifice. If you earn $115,825 (WA’s typical gross), your index is 106.9 regardless of how much you package. Packaging changes your taxable income, not your gross earnings.
**What are common salary packaging benefits in Western Australia? In WA, popular packaging items include novated car leases (common in mining regions), additional super contributions, laptop or phone plans, and, for not-for-profit employees, fringe benefits like meal cards or entertainment. Each benefit has different tax treatment under ATO rules.
How does WA’s higher index affect the tax benefits of salary packaging? A higher gross salary (like WA’s $115,825) means you are likely in a higher marginal tax bracket (30% or 37% for 2026–27). Salary packaging reduces your taxable income, so the tax saved per dollar packaged is greater than it would be for someone on a lower gross. This makes packaging more valuable in WA than in lower-index states.
Questions people ask
Does salary packaging affect my salary index ranking?
No. The salary index is calculated using your gross ordinary-time earnings before any salary sacrifice. If you earn $115,825 (WA’s typical gross), your index is 106.9 regardless of how much you package. Packaging changes your taxable income, not your gross earnings.
What are common salary packaging benefits in Western Australia?
In WA, popular packaging items include novated car leases (common in mining regions), additional super contributions, laptop or phone plans, and, for not-for-profit employees, fringe benefits like meal cards or entertainment. Each benefit has different tax treatment under ATO rules.
How does WA’s higher index affect the tax benefits of salary packaging?
A higher gross salary (like WA’s $115,825) means you are likely in a higher marginal tax bracket (30% or 37% for 2026–27). Salary packaging reduces your taxable income, so the tax saved per dollar packaged is greater than it would be for someone on a lower gross. This makes packaging more valuable in WA than in lower-index states.