Salary packaging and meal entertainment card: How they relate to Australia's minimum wage

Understanding salary packaging and meal entertainment cards in relation to Australian pay floors

When considering salary packaging and meal entertainment cards, many workers wonder how these arrangements affect their minimum pay entitlement. It is important to separate the legal minimum wage from the fringe benefits that can be part of a salary package. This guide explains the pay floor that applies and clarifies common misunderstandings.

What is the legal minimum wage?

The Fair Work Commission sets the national minimum wage each year. From the first full pay period on or after 1 July 2026, the adult national minimum wage is $26.44 per hour, $1,004.90 per week for a 38‑hour week, or $33.05 per hour for casual employees. These rates apply to national‑system employees who are award‑free and not covered by an enterprise agreement. Most private‑sector employees are in the national system, though some state public sector and local government employees, and some Western Australian sole traders and partnerships, are covered by state awards instead.

It is critical to note that not every worker receives $26.44 per hour. Junior employees, apprentices, trainees, and workers on introductory award rates or supported wages may be paid less. For award‑free juniors, the Fair Work Ombudsman publishes percentage‑based rates: for example, a 16‑year‑old gets 47.3% of the adult rate ($12.51 per hour), and a 20‑year‑old gets 97.7% ($25.84 per hour). Apprentice and trainee rates for award‑free employees follow the Miscellaneous Award, not the junior percentages.

How salary packaging interacts with minimum wage

Salary packaging (also called salary sacrifice) is an arrangement where an employee agrees to forgo part of their pre‑tax salary in exchange for benefits such as a meal entertainment card, a car, or superannuation contributions above the guarantee. A meal entertainment card is a specific fringe benefit that can be used for dining, takeaway, or similar expenses. These benefits are not wages; they are non‑cash perks.

Crucially, salary packaging does not reduce the minimum cash wage your employer must pay you. The Fair Work Ombudsman explains that after salary sacrifice, your remaining cash pay must still equal or exceed the applicable minimum wage (national minimum, award rate, or agreement rate). For example, if your award rate is $26.44 per hour, you cannot be paid less than that in cash, even if you also receive a meal entertainment card worth $5,000 per year. The card is an additional benefit, not a substitute for wages.

Award and agreement rates

Many employees are covered by a modern award or an enterprise agreement. These instruments can set a higher minimum rate than the national minimum wage. For example, from 1 July 2026, modern award minimum wages rise by 4.75%, but the lowest ongoing classification cannot sit under the national minimum. An introductory rate (limited to the first six months) cannot be less than $25.74 per hour or $978.10 per week. If your award or agreement specifies a higher rate, that rate is your legal floor. Salary packaging does not override that floor.

If you are award‑free and agreement‑free, the national minimum wage applies. However, your employer may still offer salary packaging as a voluntary option. The Rate tables page lists current award and national minimum rates for reference.

Superannuation is on top

When discussing pay, remember that the super guarantee is an employer payment on top of ordinary time earnings. From 1 July 2026, the super guarantee rate is 12%. This contribution is calculated on your ordinary time earnings, which include your base salary or wage before any salary sacrifice. Even if you sacrifice part of your salary for a meal entertainment card, your employer must still pay super on your full ordinary time earnings (the amount before sacrifice). This is a legal requirement enforced by the Australian Taxation Office.

What the reference does not cover

The on‑site reference provides the national minimum wage, award backstop rates, ABS earnings data, and junior percentages. It does not contain a specific market rate for salary packaging or meal entertainment cards. These benefits vary widely between employers and are not a pay floor. For a precise figure on how much your employer might offer as a meal entertainment card, you would need to consult your employment contract or salary packaging policy. This guide does not provide tax advice; the tax treatment of meal entertainment cards is governed by the ATO's fringe benefits tax rules.

Summary

• The legal minimum wage is $26.44 per hour (from 1 July 2026) or your award/agreement rate, whichever is higher.
• Salary packaging and meal entertainment cards are fringe benefits, not wages. They do not reduce the minimum cash pay you must receive.
• Superannuation of 12% is paid on top of your ordinary time earnings, unaffected by salary sacrifice.
• Junior, apprentice, and supported wage rates can be lower than the adult rate.
• For more detail, see the Which minimum wage applies guide and the How the figures work page.