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Salary sacrifice car companies and where your pay sits on the Australian salary index
Understand how salary sacrifice car companies affect your gross pay and where it lands on the national salary index. No invented figures, just the rules.
The salary index is based on gross ordinary-time earnings before salary sacrifice, so the figure for a role at a salary sacrifice car company is uncertain without a specific award or enterprise agreement.
What is salary sacrifice for car companies?
Salary sacrifice car companies refer to employers—often in automotive retail, leasing, or fleet management—that offer employees the option to sacrifice part of their pre-tax salary in exchange for a car, usually through a novated lease. This is a common fringe benefit that reduces taxable income but does not change the gross earnings figure used in the Salary Index. The index is a benchmark: 100 equals the national full-time adult ordinary-time earnings, which the Australian Bureau of Statistics sets at $108,352 a year (May 2026).
How the salary index works with salary sacrifice
The salary index is calculated as your yearly gross ordinary-time earnings divided by the national line, times 100. For example, if you earn $120,000 a year, your index is about 111. If you then salary sacrifice $20,000 for a car, your gross earnings remain $120,000 for index purposes. The sacrifice only affects your taxable income and take-home pay. So when you hear about salary sacrifice car companies, remember that the index number you see for a role or industry is based on the full gross amount, not the amount after sacrifice.
Where does a typical car industry role sit on the index?
The reference does not provide a specific index for the automotive industry. However, you can compare related sectors. For instance, Retail trade has an index of 75.9, while Professional, scientific and technical services sits at 114.7. Car dealerships and leasing companies may fall under retail trade or professional services depending on the role. Without a precise award or enterprise agreement, the index for a salary sacrifice car company role is uncertain. Use the pay guides for award rates if you need a floor.
State differences matter
Where you work also affects the index. The states page shows that Western Australia has an index of 106.9 ($115,825 annualised), while Tasmania is 88.6 ($96,008). If you work for a car company in WA, your gross pay is likely higher than the national average. Salary sacrifice can still be applied, but the index comparison remains based on gross earnings before sacrifice.
Tax and super considerations
Salary sacrifice reduces your assessable income for tax purposes. For the 2026–27 year, resident tax rates (excluding Medicare) are nil up to $18,200, then 15% to $45,000, 30% to $135,000, 37% to $190,000, and 45% above. The Medicare levy is 2%. Super guarantee is 12% on gross earnings (including sacrificed amounts), up to the maximum contribution base of $270,830. So salary sacrifice car companies still pay super on the full gross amount, which is a benefit.
Example: comparing a salary sacrifice arrangement
Suppose you earn $108,352 (index 100) and sacrifice $15,000 for a car. Your taxable income drops to $93,352, saving you about $4,500 in tax (depending on your bracket). Your index remains 100 because the sacrifice does not alter gross earnings. If you instead earn $80,000 (index 73.8), sacrificing $15,000 would bring taxable income to $65,000, but your index stays at 73.8. The how the index works page explains this in more detail.
What the index does not show
The salary index is a benchmark for full-time adult ordinary-time earnings. It does not reflect casual loading, overtime, bonuses, or salary sacrifice benefits. For casual roles, the national minimum wage is $26.44/hr (index 48.2), and casual loading adds 25% ($33.05/hr). Salary sacrifice car companies may offer different conditions. Always check your award or enterprise agreement.
Common questions about salary sacrifice and the index
Many people ask whether salary sacrifice improves their index number. It does not, because the index uses gross earnings. However, salary sacrifice can improve your take-home pay by reducing tax. The index is a tool to compare pay across industries and states, not a measure of disposable income. For more context, see the topics page on salary packaging.
Final thoughts on salary sacrifice car companies
When evaluating a job at a salary sacrifice car company, focus on the gross salary first—that determines your index number. Then consider the value of the salary sacrifice benefit. The index gives you a quick sense of where the pay sits against the national line, but it is not a complete picture. Use the Salary Index, state comparisons, and industry benchmarks to make informed decisions.
Three key takeaways
- The salary index is based on gross ordinary-time earnings, not post-sacrifice income.
- Salary sacrifice car companies offer a tax-effective benefit, but it does not change your index number.
- Without specific award or enterprise agreement data, the exact index for a role at a salary sacrifice car company is uncertain. Use the national line and industry averages as a starting point.
Questions people ask
Does salary sacrifice change my salary index number?
No. The salary index uses your gross ordinary-time earnings before any salary sacrifice deductions. If you earn $108,352 a year and sacrifice $15,000 for a car, your index remains 100. The index measures what you earn, not what you take home.
How do car companies use salary sacrifice in pay?
Car companies (or any employer) can offer salary sacrifice arrangements, often novated leases, where the employee agrees to forgo part of their pre-tax salary in exchange for a car benefit. The gross pay reported to the Australian Bureau of Statistics still includes that sacrificed amount, so the industry or company average may not reflect the sacrifice.
Is salary sacrifice included in the ABS average earnings?
Yes, the ABS Average Weekly Earnings survey captures gross ordinary-time earnings before deductions such as salary sacrifice. So the national line of $108,352 includes amounts that may later be sacrificed. The index is based on that gross figure, not post-sacrifice income.