Salary packaging may be a way to structure an employee’s income within the rules of the Australian Taxation Office (ATO). This may affect take-home pay and income tax treatments. Salary packaging NSW health programs may have specific effects for New South Wales Health workers; see the Salary Packaging Australia Guide for details. This article provides general information on what salary packaging is and how it may impact NSW health employees.
Discover everything you need to know about Health Salary Packaging in Australia. Read the full guide now.
Key takeaways
- Salary packaging is an income structuring agreement between an employer and employee.
- Some employers have to pay FBT on certain benefits.
- NSW Health salary packaging is affected by a share of savings arrangement.
- Understand what benefits may be available for NSW Health employees to salary package.
- Novated leases may permit employees to salary package certain vehicle expenses.
- NSW Health partners with certain salary packaging providers.
- Salary packaging may have implications for government benefits and tax.
- FAA provides administrative support and general information to clients.
What you should know about salary packaging with NSW Health
In a salary packaging arrangement that operates within the ATO’s rules, an employee may receive part of their salary as benefits and part as income. The employer withholds a portion of the employee’s pre-tax income in exchange for covering agreed-upon personal expenses. This may change an employee’s taxable income, depending on their own particular circumstances.
Fringe benefits tax
Some employers may need to pay fringe benefits tax (FBT) on some fringe benefits included in their employees’ salary packaging arrangements. Fringe benefits may include expenses, such as:
Payments on a student loan debt.
Gym memberships.
Permitting an employee to use a company vehicle for personal use.
FBT calculations are based on the grossed-up value of the benefit provided to the employee. A grossed-up value is the gross income that would be required for the employee to purchase the benefit personally at the highest marginal tax rate, including the Medicare Levy.
Certain employers may be exempt from FBT obligations up to certain capping thresholds. We’ll break down those caps and which employers are eligible in the next section.
Disclaimer: This is general information. Financial advice is provided only by authorised representatives of Lifespan Financial Planning Pty Ltd (AFSL 229892). Credit assistance (including novated leasing) is provided by FAA Group under its Australian Credit Licence (ACL 388789). FAA consultants assist with general information and administrative support only.
NSW Health salary packaging caps for 2026
The types of organisations that are FBT-exempt under ATO rules are the following:
Public benevolent institution (other than a public or not-for-profit hospital) that is registered by the Australian Charities and Not-for-profits Commission and endorsed by the ATO.
Health promotion charity that is registered by the Australian Charities and Not-for-profits Commission and endorsed by the ATO.
Public or not-for-profit hospital.
Public ambulance service.
This article will focus specifically on public or not-for-profit hospitals and public ambulance services. The grossed-up salary packaging cap for these employers is $17,000 in relation to general living expenses. This equates to a non-grossed-up cap of $9010. There may also be another $2650 cap available for meal entertainment expenses.
If an employer exceeds this cap, FBT must be paid on the excess.
Share of savings policy explained
In 2002, negotiations between NSW Health and unions led to the establishment of a share of savings policy. Under this arrangement, any tax savings may be split between the eligible HSU Award healthcare worker and NSW Health. Eligible workers are those employed under an HSU Award where there is no joint representation with the Australian Salaried Medical Officers Federation.
The split was typically 50/50. After a 2023 industrial agreement, the typical split was changed to 70/30 in favour of the employee. A new industrial agreement in 2024 changed the typical share of savings arrangement to 100% of tax savings going to the eligible employee.
What you may salary package as a NSW Health employee
The benefits NSW Health employees may include in their salary packaging arrangement are left to the discretion of their employer. Eligible employees may speak with their employer regarding the limits of their salary packaging NSW health program. Here are some potential benefits employees may have access to.
Everyday living expenses ($9010 cap)
Mortgage.
Rent.
Credit card payments.
Utility bills.
Meal entertainment and venue hire ($2650 cap)
Restaurant meals.
Professional catering for a private function.
Home catering expenses.
Holiday food and drink consumed.
Novated lease arrangements
Disclaimer: This is general information. Financial advice is provided only by authorised representatives of Lifespan Financial Planning Pty Ltd (AFSL 229892). Credit assistance (including novated leasing) is provided by FAA Group under its Australian Credit Licence (ACL 388789). FAA consultants assist with general information and administrative support only.
A novated leasing arrangement may be a way for NSW Health employees to salary package the lease and running costs of a motor vehicle. An employer and employee may enter an agreement with a vehicle financing entity to cover the car’s costs in one all-inclusive payment. However, lease arrangements can vary. Some running costs that may be included are:
- Fuel.
Insurance.
Maintenance.
Registration.
Tyre costs.
Electric vehicles
The Australian government’s Electric Vehicle Discount bill was enacted in 2022. This legislation may permit certain electric vehicles to be FBT-exempt in salary packaging agreements. This may have an effect on an employee’s tax bill.
Cars are generally subject to FBT. An employer may require an employee to make contributions to the lease from their post-tax salary to offset that cost. An FBT-exempt electric vehicle may be paid for entirely from pre-tax income, depending on the details of the lease and your employer’s policy.
To be FBT-exempt, an electric vehicle must meet these criteria:
The car is zero or low-emission.
The car was first held and used on or after 1 July 2022.
The car is used by a current employee or their associates (such as family members).
Luxury car tax has never been payable on the importation or sale of the car.
Relocation expenses benefit
Workers who have permanently relocated for their job may include some relocation costs in their salary package, such as:
Utility connection costs.
Transport costs.
Temporary accommodation.
Removal and shipping of household items.
These benefits must be approved by the employer and meet relocation benefit rules.
NSW Health salary packaging providers
NSW Health isn’t a single employer. There are several local health districts and networks. Different providers may cover different areas. Employees are typically served by the provider specifically chosen by their employer. Providers recognised by NSW Health include:
SalaryPackagingPLUS.
SmartSalary.
Maxxia.
LeasePLUS.
Other salary packaging NSW health providers may be available. However, this depends on your employer’s policies.
Find out how Queensland Health employees can make the most of salary packaging in 2026.
Additional implications of salary packaging
People often consider the effect that salary packaging may have on other benefits and tax outcomes before entering an arrangement. Salary packaging may impact:
Centrelink benefits.
Medicare Levy surcharge.
Some tax offsets.
Child support payments.
There may also be fees associated with the administration of a salary packaging agreement. Independent financial advice from a licensed financial adviser and tax advice from a registered tax agent may help you assess how an arrangement affects your circumstances.
You may use our salary packaging calculator for general information about salary packaging effects based on the details you input. Results are illustrative only and do not constitute financial or tax advice.
Conclusion
The salary packaging options available to NSW Health employees may depend on individual tax outcomes and applicable capping thresholds. General information about topics such as share of savings policies and relocation benefits may be considered as part of your research into how salary packaging NSW health relates to your everyday expenses and individual circumstances.
Important Disclaimer: This article provides general information only and does not constitute personal financial, tax, or credit advice. Financial advice is provided only by authorised representatives of Lifespan Financial Planning Pty Ltd (AFSL 229892). Credit assistance (including novated leasing) is provided by FAA Group under its Australian Credit Licence (ACL 388789). Before making any decisions about salary packaging or your financial situation, you should seek advice from a licensed financial adviser and/or registered tax agent who understands your specific circumstances and objectives.
