How NSW Health Salary Sacrifice Affects Your Take-Home Pay

Understanding Your Take-Home Pay as a NSW Health Employee

When you work for NSW Health, your gross pay is set by an award or enterprise agreement. But the amount that lands in your bank account each fortnight depends on income tax, the Medicare levy, and any salary sacrifice arrangements. This guide explains how these factors work together so you can plan your budget.

The Award Rates That Set Your Gross Pay

Most NSW Health employees are covered by either the Health Professionals and Support Services Award (MA000027) or the Health Employees’ Conditions of Employment (State) Award 2025. The Fair Work Ombudsman publishes current pay rates for the federal award. For example, a Level 1 support services employee (full-time) earns $1,024.70 per week or $26.97 per hour. Higher classifications pay more: Level 8 pay point 3 is $1,409.70 weekly ($37.10 per hour).

Your actual pay may differ if you work part-time, casual, or under a different classification. Always check your specific award or enterprise agreement. The Take-home pay calculator on this site can help you estimate your net pay.

How Income Tax Reduces Your Pay

Australia uses a progressive tax system. For the 2026–27 tax year, the tax brackets are:

• Up to $18,200: nil
• $18,201 to $45,000: 15 cents per dollar over $18,200
• $45,001 to $135,000: $4,020 plus 30 cents per dollar over $45,000
• $135,001 to $190,000: $31,020 plus 37 cents per dollar over $135,000
• Over $190,000: $51,370 plus 45 cents per dollar over $190,000

You may also be eligible for the Low Income Tax Offset (LITO), which can reduce your tax to zero if your taxable income is below about $45,000.

The Medicare Levy: A Flat 2% (With Exemptions)

Most residents pay the Medicare levy at 2% of taxable income. However, if your taxable income is below $28,011 (single), you pay nothing. Between $28,011 and $35,013, you pay a reduced amount (10 cents per dollar over the lower threshold). Above $35,013, you pay the full 2%. These are the latest published single-person thresholds. If you have a family or dependents, different thresholds apply.

Because salary sacrifice lowers your taxable income, it can help you stay below the Medicare levy thresholds or reduce the amount you owe.

How NSW Health Salary Sacrifice Changes the Numbers

NSW Health salary sacrifice (also called salary packaging) allows you to use pre-tax income to pay for eligible items such as:

• A car (via a novated lease)
• Superannuation contributions (above the compulsory super guarantee)
• Living expenses (e.g., mortgage or rent, under certain conditions)
• Other approved benefits

When you salary sacrifice, the amount is deducted from your gross pay before tax is calculated. This reduces your taxable income, so you pay less income tax and Medicare levy. However, your employer’s super guarantee (12% from 1 July 2026) is calculated on your ordinary time earnings, which may be lower after salary sacrifice. Also, some salary sacrifice benefits (like a car) may have fringe benefits tax implications, but NSW Health often provides a “salary packaging” arrangement that caps FBT-exempt benefits.

Example: Take-Home Pay for a Level 1 Employee

Let’s say you are a full-time Level 1 support services employee earning $1,024.70 per week, or $53,284.40 annually (52 weeks). Without salary sacrifice:

• Gross annual: $53,284.40
• Tax: Using the 2026–27 brackets, tax on $53,284.40 is $4,020 + 30% of ($53,284.40 – $45,000) = $4,020 + $2,485.32 = $6,505.32
• LITO: At $53,284.40, LITO is $325 – 1.5% of ($53,284.40 – $45,000) = $325 – $124.27 = $200.73 (rounded)
• Net tax after LITO: $6,505.32 – $200.73 = $6,304.59
• Medicare levy: 2% of $53,284.40 = $1,065.69 (full levy as income > $35,013)
• Total deductions: $6,304.59 + $1,065.69 = $7,370.28
• Net annual: $53,284.40 – $7,370.28 = $45,914.12
• Fortnightly take-home: $45,914.12 / 26 = $1,765.93

Now, if you salary sacrifice $10,000 per year (e.g., into super or a car lease):

• Reduced taxable income: $53,284.40 – $10,000 = $43,284.40
• Tax on $43,284.40: 15% of ($43,284.40 – $18,200) = 15% of $25,084.40 = $3,762.66
• LITO: At $43,284.40, LITO = $700 – 5% of ($43,284.40 – $37,500) = $700 – $289.22 = $410.78
• Net tax after LITO: $3,762.66 – $410.78 = $3,351.88
• Medicare levy: Income $43,284.40 is above $35,013, so full 2% = $865.69
• Total deductions: $3,351.88 + $865.69 = $4,217.57
• Net annual: $43,284.40 – $4,217.57 = $39,066.83 (but you also received $10,000 in benefits, so total value is $49,066.83)
• Fortnightly take-home: $39,066.83 / 26 = $1,502.57 (plus the benefit)

In this example, salary sacrifice reduces your fortnightly cash pay but gives you a non-cash benefit worth $10,000. The net benefit is that you save $7,370.28 – $4,217.57 = $3,152.71 in tax and Medicare levy.

Important Considerations

• Super guarantee: Your employer pays 12% super on your ordinary time earnings. If you salary sacrifice, your OTE may be lower, so your super contributions could drop. However, you can salary sacrifice additional amounts into super to compensate.
• Fringe benefits tax: Some salary sacrifice items (like a car) may attract FBT, but NSW Health often uses a “salary packaging” arrangement that caps FBT-exempt benefits (e.g., up to $9,010 for living expenses). Check with your employer.
• Medicare levy surcharge: If you earn above $93,000 (single) and don’t have private hospital cover, you may pay an extra 1% to 1.5%. Salary sacrifice can reduce your income below the threshold.
• HELP/HECS: If you have a student loan, your repayment is based on your taxable income. Salary sacrifice reduces that income, potentially lowering your compulsory repayment.

Using the Right Tools

To estimate your own take-home pay, use the Take-home pay calculator on this site. For more on salary packaging rules, see the Salary packaging guide. The Tax and Medicare page explains thresholds and offsets in detail.

Final Thoughts

NSW health salary sacrifice can be a powerful way to reduce your tax and increase the value of your total remuneration. However, it’s not a one-size-fits-all strategy. Your personal circumstances—such as your marginal tax rate, family situation, and financial goals—will determine whether it’s right for you. Always consult a qualified tax professional or your employer’s salary packaging provider before making decisions.

Remember, the figures above are estimates only. They do not include HELP/HECS, the Medicare levy surcharge, or payroll tax-table rounding. For a precise calculation, use the Clearance tool or speak to your payroll department.