Salary packaging WA government: how it interacts with the minimum wage

Salary packaging WA government: what it means for your pay floor

Salary packaging (also called salary sacrifice) is a common benefit for Western Australian government employees. It lets you swap part of your pre‑tax salary for items such as a car, laptop, or additional super contributions. While packaging can reduce your taxable income, it does not change the minimum wage or award rate you are legally entitled to. This guide explains how the legal floor works alongside salary packaging, superannuation, and tax.

The legal minimum wage

The Fair Work Commission sets the national minimum wage. 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 for a 38‑hour week. Casual employees receive a loading of 25%, giving a minimum of $33.05 per hour. These rates apply to national‑system employees who are not covered by a modern award or enterprise agreement.

However, many WA government employees are in the state industrial relations system. Their minimum wage is set by the WA Industrial Relations Commission through state awards or enterprise agreements. The national minimum wage does not directly apply to them, but state awards cannot set a rate below the state minimum wage (which is often aligned with the national figure). If you work for the WA government, check your award or agreement for the exact rate.

For award‑free employees in the national system, junior rates, apprentice rates, and supported wages can be lower than the adult minimum. The reference table on this site shows junior percentages for award‑free workers. For example, a 17‑year‑old award‑free employee must receive at least $15.29 per hour (57.8% of the adult rate).

How salary packaging fits in

Salary packaging is a separate arrangement from your minimum wage entitlement. Your employer must pay you at least the legal floor in cash or as a benefit that counts as wages. The packaged benefit does not reduce that floor. For example, if your award rate is $30 per hour, you cannot package so much that your cash pay falls below $30 per hour (or the equivalent weekly amount). The Fair Work Ombudsman enforces this rule.

Packaging can affect your taxable income. The ATO allows certain benefits to be salary‑sacrificed, reducing the amount of pay subject to income tax and the Medicare levy. But the minimum wage is a gross figure before tax and before packaging. Your net pay after packaging may be lower, but your gross entitlement remains the same.

Superannuation on top

Employers must pay the super guarantee on your ordinary time earnings. From 1 July 2026, the rate is 12%. This is paid on top of your wage, not deducted from it. If you salary sacrifice part of your salary into super, those contributions are not ordinary time earnings, so the employer does not pay super guarantee on them. But if you package a non‑super benefit (e.g., a car), your ordinary time earnings for super purposes may reduce, potentially lowering the employer’s super contribution. Always review your agreement, as some WA government awards specify how packaging interacts with super.

Award and agreement rates can be higher

A modern award or enterprise agreement can set a rate above the national minimum wage. Many WA government employees are covered by enterprise agreements that include higher pay rates, allowances, and conditions. Salary packaging is often negotiated as part of these agreements. The legal floor is just that—a floor. Your actual wage may be higher, and packaging is arranged on top of that higher rate.

Tax considerations

For the 2026‑27 tax year, resident employees with the full tax‑free threshold pay no tax on the first $18,200 of annual income. The Medicare levy (2%) applies once annualised ordinary gross earnings exceed $30,000. Salary packaging can reduce your taxable income, potentially lowering your tax and Medicare levy. However, the low‑income tax offset and other offsets are not included in this model. The ATO provides specific guidance on salary sacrifice arrangements.

Separating the figures

It helps to distinguish between:

• Legal minimum: the floor set by the Fair Work Commission or state commission.
• Award rate: the minimum for your classification under a modern award.
• Survey average: the ABS reports average full‑time adult ordinary‑time earnings of $2,083.70 per week (May 2026). This is a market average, not a legal requirement.
• Negotiated salary: what you and your employer agree, which can be above the minimum.

Salary packaging applies to your negotiated salary, not to the legal minimum. The legal minimum is always paid in full before any packaging.

Further reading

For more on which minimum wage applies to you, see Which minimum wage applies. To compare rates across awards and years, visit Rate tables.

Summary

Salary packaging for WA government employees is a valuable benefit, but it does not override the minimum wage. Your employer must pay at least the applicable legal floor, and packaging is arranged on top. Super is paid on ordinary time earnings, and packaging may affect that calculation. Always check your award or enterprise agreement for specific rules.

Orientation only. This is not a pay determination, tax advice, or legal advice. Consult the Fair Work Ombudsman or a qualified professional for your situation.

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