Salary Packaging Calculator (NFP / Hospital)

Quick answer

If you work for an eligible charity (PBI / health promotion charity), you can usually salary package about $15,900 of living expenses per FBT year tax-free at the employer level. Public and not-for-profit hospital and public ambulance staff sit on the lower $9,010 cash cap. The saving is roughly your marginal tax rate (including Medicare) × the cash you package — minus any admin fee. The catch: packaging creates a reportable fringe benefits amount (RFBA) that can affect HECS and the Medicare Levy Surcharge.

Packaging vs salary sacrifice (super)

People use the words interchangeably. On WhatsMyPay we keep them separate:

• Salary packaging (this page) — paying rent, mortgage, utilities and similar living costs from pre-tax salary under an FBT concession. Mostly available in NFP and hospital employment.
• Salary sacrifice into super — redirecting pre-tax salary into superannuation. Available more widely, limited by the concessional contributions cap. Use our salary sacrifice calculator.

Many NFP employees do both. Model them separately, then add the RFBA layer here before you decide.

ATO caps (FBT years ending 31 Mar 2023–2027)

The ATO publishes these capping thresholds as grossed-up dollars. Providers and payslips usually talk in the cash-equivalent amounts:

Sources: ATO fringe benefits tax rates and thresholds; FBT rates and thresholds for 2026. Type 2 gross-up rate 1.8868; FBT rate 47%. Caps unchanged through the FBT year ending 31 March 2027.

The Type 2 gross-up (why $30,000 becomes $15,900)

Most salary-packaged living expenses use the Type 2 gross-up factor of 1.8868 (benefits where the employer cannot claim a GST credit). Cash room inside the cap is:

• $30,000 ÷ 1.8868 ≈ $15,899.94 (providers round to $15,900)
• $17,000 ÷ 1.8868 ≈ $9,010.00
• $5,000 ÷ 1.8868 ≈ $2,650.00 for meal entertainment / venue hire

Your income statement then shows an RFBA roughly equal to that grossed-up value — not the cash figure.

Worked example 1 — charity worker, $85,000, full $15,900 cap

Assume a PBI employee on $85,000 packages the full $15,900 living-expense cap, no meal entertainment, $150 admin fee, no HECS.

• Taxable income falls from $85,000 to $69,100
• At a 30% marginal rate + 2% Medicare, tax + Medicare on the packaged $15,900 is about $5,088
• Net benefit after a $150 fee ≈ $4,938 a year (~$190 a fortnight)
• RFBA ≈ $15,900 × 1.8868 = $30,000 on the income statement

Worked example 2 — hospital nurse, $85,000, $9,010 cap

Same salary, but the employer is a public or not-for-profit hospital. The cash cap drops to about $9,010.

• Taxable income falls to $75,990
• Tax + Medicare saved ≈ $2,883 before fees
• RFBA ≈ $9,010 × 1.8868 = $17,000

If your hospital is also a registered PBI, the hospital cap still applies. Confirm with payroll — do not assume the $15,900 figure from a charity colleague.

Worked example 3 — the HECS RFBA trap

Same PBI worker on $85,000 packages $15,900. Taxable income is $69,100, but HELP repayment income adds the RFBA:

• Without packaging, repayment income ≈ $85,000
• With packaging, repayment income ≈ $69,100 + $30,000 = $99,100
• Compulsory HECS can rise even while income tax falls

Tick the HECS box above to see the change. Packaging can still be worthwhile on tax grounds — just do not expect it to shrink your HELP bill the way a lower taxable income might suggest. Cross-check with the HECS-HELP calculator and, if you are near MLS thresholds, the Medicare Levy Surcharge calculator.

FBT year vs financial year

The packaging cap resets on 1 April each year (the FBT year runs 1 April to 31 March). Your income tax year still runs 1 July to 30 June. Unused cap does not roll over. Many providers send a usage statement in February so you can top up before 31 March.

How this calculator works

1. Pick the employer cap (PBI $15,900 cash or hospital $9,010 cash) and clamp living + meal amounts to those caps.
2. Estimate income tax + Medicare levy on salary with and without the packaged cash using 2026-27 resident brackets and LITO.
3. Net benefit = tax saved − admin fee. Packaged cash is treated as value you still receive (paid to rent/mortgage/etc.).
4. RFBA ≈ packaged cash × 1.8868 (Type 2).
5. Optional HECS panel compares repayment income ≈ taxable vs taxable + RFBA using the 2026-27 marginal HELP bands.

Frequently asked questions

Primary sources

• Fringe benefits tax — rates and thresholds — ATO
• FBT rates and thresholds for 2026 — ATO
• Consequences of having a reportable fringe benefits amount — ATO
• HECS-HELP compulsory repayments — ATO

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