Unlocking the Benefits of Salary Sacrifice in Australia’s Healthcare Sector: What You Need to Know

Did you know that as a healthcare professional in Australia, you could be saving thousands of dollars every year through salary sacrifice?

While many healthcare workers focus on securing higher wages and better work-life balance, salary sacrifice (also known as salary packaging) remains an underused financial advantage—especially among migrants and internationally qualified nurses who may be unfamiliar with Australian tax benefits.

Salary sacrifice allows you to redirect part of your pre-tax salary towards approved expenses like rent, mortgage repayments, superannuation, vehicles, and living costs—ultimately reducing your taxable income and boosting your take-home pay.

So how does it work? And more importantly—who is eligible?

In this blog, we’ll break it all down:

✅ How salary sacrifice works

✅ What expenses you can salary sacrifice

✅ Who qualifies for this tax-saving opportunity

✅ Why this is a major benefit for healthcare professionals in Australia

What is Salary Sacrifice?

At its core, salary sacrifice is an agreement between you and your employer where you choose to allocate a portion of your pre-tax salary to specific approved expenses before tax is deducted.

Since your taxable income is lowered, you pay less tax and take home more money—all while covering essential expenses like housing, transport, and retirement savings.

For healthcare professionals, salary sacrifice is widely available, particularly if you work for:

✔️ Public hospitals

✔️ Not-for-profit healthcare services

✔️ Charitable organisations

✔️ Aged care and disability care providers

If your employer falls into one of these categories, you could be eligible for major tax savings that most professions don’t have access to.

How Does Salary Sacrifice Work?

When you enter into a salary packaging arrangement, your employer redirects part of your salary to approved expenses before tax is applied.

Here’s an example:

💰 Your annual salary: AUD $90,000

💼 Salary sacrificed towards rent: AUD $15,000

📉 Your new taxable income: AUD $75,000

Since you’re only taxed on AUD $75,000, your income tax bill is significantly lower, and you save thousands of dollars per year.

✅ More disposable income

✅ Less tax paid

✅ Financial freedom and better savings potential

Who Can Benefit from Salary Sacrifice?

If you’re a healthcare professional working in a public hospital or not-for-profit health organisation, you’re likely eligible for salary sacrifice benefits.

Healthcare workers employed by Public Benevolent Institutions (PBIs) or Health Promotion Charities (HPCs) can access additional tax benefits and may qualify for Fringe Benefits Tax (FBT) exemptions or reductions.

This includes:

🏥 Public hospital nurses and doctors

🏡 Aged care workers

🩺 Disability and community health professionals

🚑 Paramedics and emergency responders

If your employer is a not-for-profit or public sector health provider, salary packaging could help you keep more of your earnings every single pay cycle.

What Can You Salary Sacrifice?

One of the biggest advantages of salary sacrifice is the wide range of approved expenses that can be deducted from your pre-tax income.

Some of the most common expenses include:

🏠 Mortgage or Rent Payments – Reduce your taxable income by directing part of your salary towards your home loan or rental costs.

🚗 Novated Car Leases – Lease a car using your pre-tax earnings, covering costs like fuel, insurance, and maintenance with tax benefits.

💰 Superannuation Contributions – Boost your retirement savings while lowering your taxable income. These contributions are taxed at only 15%—much lower than your standard income tax rate.

🛒 Living Expenses – Some salary packaging arrangements cover daily expenses, including groceries, utility bills, and credit card repayments.

🎓 School Fees & Childcare – If you have children, you may be able to salary sacrifice school fees and childcare costs—reducing financial pressure on your family.

💻 Work Equipment (Laptops, Phones, etc.) – Some employers allow you to salary package tech devices used for work purposes.

Key Benefits of Salary Sacrifice for Healthcare Workers

✅ 1. Lower Taxable Income = More Money in Your Pocket

By reducing your taxable salary, you pay less tax and take home more earnings each year.

✅ 2. FBT Exemptions for Public and Not-for-Profit Workers

If you work for an FBT-exempt employer (such as a public hospital or charity), you can salary package up to AUD 15,900 per year tax-free!

✅ 3. Boost Your Superannuation Savings

Salary sacrificing extra contributions into super helps grow your retirement fund while reducing your annual tax bill.

✅ 4. Reduce Your Cost of Living

Use pre-tax salary to cover everyday expenses, helping you save on big-ticket items like rent, mortgage repayments, and transport.

✅ 5. Simplify Financial Management

Since salary sacrifice automatically allocates funds to essential expenses, budgeting becomes easier and stress-free.

Things to Consider Before Setting Up Salary Sacrifice

Before entering a salary sacrifice agreement, consider:

⚠️ Superannuation Contributions May Be Affected

Since salary sacrifice lowers your reported salary, it may reduce your employer’s super contributions.

⚠️ Impact on Government Benefits

Lower taxable income may affect eligibility for tax offsets and government benefits.

⚠️ Not All Employers Offer Salary Sacrifice

Speak with your HR or payroll department to confirm if your workplace allows salary packaging.

Final Thoughts: Maximise Your Earnings with Salary Sacrifice

For healthcare professionals in Australia, salary sacrifice is a game-changer. By using this powerful tax strategy, you can:

✔️ Reduce your taxable income

✔️ Take home more pay each year

✔️ Boost your retirement savings

✔️ Cover essential expenses pre-tax

If you’re planning to migrate to Australia as a nurse, midwife, or healthcare worker, salary packaging is just one of many financial advantages that make Australia an attractive career destination.

Ready to make your move? Book a consultation today for expert migration advice!

📌 Book a consultation: www.solvi.com.au/book-a-consult

📌 Nurse Registration Course: www.nurseregistration.com