Salary Packaging in the Health Industry: Award Coverage vs Award-Free Minimum Rates

Salary Packaging in the Health Industry: Which Pay Floor Applies?

Salary packaging is common in the health industry, especially for employees of public hospitals, not-for-profit aged care, and charitable health organisations. It allows you to swap part of your salary for tax-free or tax-concession benefits such as cars, laptops, or mortgage payments. But salary packaging does not change the fundamental question: what is the minimum pay floor that applies to you? This guide explains how award coverage, the national minimum wage, and award-free rates interact with salary packaging in the health industry.

The Legal Minimum: Award-Free Workers

If you are an adult employee in the health industry who is not covered by a modern award or enterprise agreement, the national minimum wage applies. From 1 July 2026, the Fair Work Commission set that rate at $26.44 per hour or $1,004.90 per week for a 38-hour ordinary week. Casual workers receive a 25% loading, making the casual minimum $33.05 per hour. Your employer must pay you at least this amount in cash, before any salary packaging arrangement. Salary packaging reduces your taxable income but cannot reduce the cash wage below the legal floor.

Remember that junior employees, apprentices, and trainees may be paid less. For award-free juniors, percentages of the adult rate apply (e.g., 18-year-olds receive 68.3% or $18.06 per hour). The Fair Work Ombudsman explains these rules, but the Fair Work Commission sets the national minimum.

Award Coverage in the Health Industry

Most health industry workers are covered by a modern award. Common awards include:

• Health Professionals and Support Services Award (for allied health, admin, and support staff)
• Nurses Award (for enrolled and registered nurses)
• Medical Practitioners Award (for doctors in training)
• Aged Care Award (for residential and home care workers)

These awards set minimum wages significantly higher than the national minimum. For example, a registered nurse under the Nurses Award will have a classification-based rate well above $26.44 per hour. An enterprise agreement can also set higher rates. If you are award-covered, your minimum cash wage is the award rate, not the national minimum. Salary packaging is then applied on top of that higher rate.

To check which award applies, see our Which minimum wage applies guide. For detailed rate tables, visit Rate tables.

Survey Averages vs. Legal Floors

The Australian Bureau of Statistics (ABS) publishes average earnings data. In May 2026, the ABS reported full-time adult ordinary-time earnings of $2,083.70 per week and all-employees average total earnings of $1,579.20 per week. These are survey averages, not legal minimums. The health industry may have its own average, but our reference does not include a health-specific figure. Salary packaging can make your take-home pay higher than the cash wage, but it does not change the legal floor. Always compare your cash wage to the applicable award or national minimum.

How Salary Packaging Interacts with Super

Employers must pay superannuation guarantee of 12% on your ordinary time earnings. If you salary sacrifice a portion of your wage, your ordinary time earnings for super purposes are reduced by that sacrificed amount. Your employer still pays 12% on the reduced figure, subject to the maximum contribution base. This means salary packaging can lower your super contributions unless you negotiate otherwise. The super is an employer payment on top of your cash wage and packaged benefits.

Negotiated Salaries and Enterprise Agreements

Some health industry employees negotiate individual salaries or are covered by enterprise agreements. These can set rates above the award or national minimum. Salary packaging is often part of these arrangements. If you are negotiating, remember that the minimum cash wage must still meet the award or national floor. Salary packaging benefits are additional and should be clearly documented in your contract.

Key Takeaways

• The national minimum wage for award-free adults is $26.44/h or $1,004.90/wk (from 1 July 2026).
• Most health industry workers are covered by awards with higher minimum rates.
• Salary packaging does not reduce your minimum cash wage entitlement.
• Super guarantee is 12% on ordinary time earnings, which may be reduced by salary sacrifice.
• Always check your award coverage and classification. For more guidance, see our Guides and How the figures work.

This orientation is not a pay determination or tax advice. Consult a qualified professional for your specific situation.