Salary Packaging Car Calculator and the Australian Minimum Wage: What You Need to Know

Understanding the pay floor before using a salary packaging car calculator

If you are using a salary packaging car calculator to estimate the tax benefits of a novated lease, it is important to first understand which Australian pay floor applies to your employment. The national minimum wage, set by the Fair Work Commission, is the legal baseline, but many workers are covered by a modern award or enterprise agreement that requires a higher rate. Salary packaging does not change that floor; it is a separate arrangement that can reduce your taxable income.

The national minimum wage from 1 July 2026

From the first full pay period on or after 1 July 2026, the adult national minimum wage is $26.44 per hour or $1,004.90 per week. Casual employees receive a loading of 25%, making the casual rate $33.05 per hour. These figures apply to national-system employees who are award-free and agreement-free. Most private-sector employees are in the national system, but some state public sector and local government employees, and some Western Australian sole traders and partnerships, are covered by state awards instead.

Award and agreement rates

A modern award or enterprise agreement can set a higher rate than the national minimum. The Fair Work Ombudsman explains and enforces these instruments. For example, the lowest ongoing classification in a modern award cannot sit under the national minimum, but introductory rates (limited to the first six months) can be as low as $25.74 per hour or $978.10 per week. Always check your award or agreement to see if it applies. You can find more on Which minimum wage applies.

Junior, apprentice, and supported wages

Not every worker must receive $26.44 per hour. Award-free juniors have percentage-based rates: under 16 years old receive $9.73 per hour (casual $12.16), 16-year-olds $12.51 per hour (casual $15.64), and so on up to 20-year-olds at $25.84 per hour (casual $32.30). Apprentices and trainees follow the Miscellaneous Award rates. Supported wages for employees with disability may also be lower. These are all legal minimums.

How salary packaging interacts with minimum pay

A salary packaging car calculator helps you estimate the tax savings from sacrificing part of your pre-tax salary to pay for a car lease. This arrangement does not reduce the minimum wage or award rate you are entitled to. Your employer must still pay you at least the legal floor in cash or ordinary time earnings. Salary packaging is deducted from your gross pay after that minimum is met. If your salary is exactly the minimum wage, there is no room for salary packaging because you cannot sacrifice below the floor.

Superannuation on top

Employers must pay super guarantee of 12% on top of your ordinary time earnings. This is a separate payment, not part of your hourly or weekly wage. When you use a salary packaging car calculator, remember that salary sacrifice reduces your OTE for super purposes, so your super contributions may be lower. The minimum wage and super are distinct obligations.

Using a salary packaging car calculator correctly

A salary packaging car calculator is a tool for estimating tax savings, not for determining your pay rate. To use it, you need to know your gross salary, the cost of the car, and your marginal tax rate. The calculator will show the reduction in taxable income and the resulting tax savings. It does not change the legal minimum you must be paid. For more details on rates, see Rate tables.

Summary

Always know your applicable pay floor before considering salary packaging. The national minimum wage, award rates, and enterprise agreements set the minimum you must receive. Salary packaging is a voluntary tax arrangement that works on top of that minimum. Use a salary packaging car calculator with accurate salary figures, and remember that super is an employer payment on top.

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