Salary Package Meal Entertainment: How It Affects Your Minimum Wage Entitlement

Salary Package Meal Entertainment and Your Minimum Wage

Salary packaging for meal entertainment is a common benefit, especially in the not-for-profit sector, where employees can sacrifice part of their pre-tax salary to cover meal and entertainment expenses. While this arrangement can reduce your taxable income, it does not change your entitlement to the minimum wage. This guide explains how salary packaging interacts with Australia's pay floors and what you need to check.

What Is Salary Package Meal Entertainment?

Salary packaging (also called salary sacrifice) is an agreement between you and your employer to forgo part of your salary in exchange for a non-cash benefit. Meal entertainment benefits can include restaurant meals, takeaway food, drinks, and entertainment such as theatre tickets. The benefit is provided by your employer, and the sacrificed amount is deducted from your gross pay before tax. However, the gross pay figure used to calculate your minimum wage entitlement remains the amount before any sacrifice.

The Legal Minimum Wage Floor

Australia's minimum wage system is set by the Fair Work Commission and enforced by the Fair Work Ombudsman. From 1 July 2026, the national minimum wage is $26.44 per hour or $1,004.90 per week for a 38-hour week. This applies to employees not covered by an award or registered agreement. If you are covered by a modern award, the minimum rates in that award apply instead, and they may be higher. The Fair Work Commission's 2026 Annual Wage Review increased award rates by 4.75%, but the lowest ongoing classification cannot fall below the national minimum. Some awards have introductory rates (for the first six months) that are lower, but those rates cannot be less than $25.74 per hour or $978.10 per week.

Crucially, salary packaging for meal entertainment does not reduce your employer's obligation to pay at least the minimum wage. Your gross hourly rate (before any salary sacrifice) must be at least the applicable minimum. If your salary packaging arrangement brings your gross pay below the minimum, the arrangement is not valid, and your employer must top up your pay.

How to Check Your Rate

To ensure you are being paid correctly, compare your gross hourly rate (the amount before salary sacrifice) to the relevant minimum. Use our Which minimum wage applies tool to determine if you are covered by an award or the national minimum. Then check your pay slip: your base hourly rate should be at least the minimum. If you are a junior, apprentice, or trainee, different rates may apply – see our Rate tables for details.

Salary Packaging and Superannuation

Superannuation guarantee contributions are calculated on your ordinary time earnings, which includes any salary sacrificed amounts. So even if you sacrifice part of your salary for meal entertainment, your employer must still pay super on that sacrificed amount. The current super guarantee rate is 12% of ordinary time earnings, and this is paid on top of your gross pay.

Award and Agreement Rates

If you are covered by a modern award or an enterprise agreement, those rates are your minimum. Salary packaging cannot undercut them. For example, if your award rate is $28.00 per hour, your gross pay before salary sacrifice must be at least $28.00 per hour. Your employer cannot use salary packaging to reduce your pay below that award rate. Always check your award or agreement for the correct classification and rate.

FAQs

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For the published floors, see the rate tables and how the figures work.