Australian salaries are commonly quoted in two ways: as a "base salary" (your gross pay before tax and without super) or as a "package" (base + employer super). The distinction matters enormously — a $100,000 package is not the same as a $100,000 base salary. This guide unpacks what actually lands in your bank account.
Salary + Super: The Package vs Base Distinction
In Australia, employers must contribute a minimum of 12% of your ordinary time earnings as Superannuation Guarantee (SG) to your super fund. This is on top of your base salary in most cases. But some employers structure it differently:
- Base + Super: $90,000 base + $10,800 super = $100,800 package. Your take-home comes from the $90,000.
- Package inclusive of super: $100,000 "total package" means $89,286 base + $10,714 super. Your take-home is based on $89,286.
Always clarify with your employer or the job ad whether the stated figure includes or excludes super — it can be a $10,000+ difference in actual take-home.
What Comes Out of Your Payslip
- PAYG Withholding: Income tax deducted each pay cycle, based on your annual earnings and ATO tax tables.
- Medicare Levy: 2% of taxable income. Reduced for low earners.
- Salary Sacrifice (if applicable): Voluntary pre-tax super contributions reduce taxable income.
- Voluntary super contributions: Can be pre-tax (salary sacrifice) or post-tax (non-concessional).
Notably, employer super is NOT deducted from your pay — it's an additional cost on the employer. It doesn't reduce your take-home pay; it's deposited separately to your super fund.
Worked Example 1 — $70,000 Base Salary
| Gross Base Salary | $70,000 |
| Income Tax (16% × $26,800 + 30% × $25,000) | −$11,788 |
| LITO offset (approx −$33) | +$33 |
| Medicare Levy (2%) | −$1,400 |
| Annual Take-Home | ~$56,845 |
| Monthly | ~$4,737/mo |
| + Employer Super (12% = $8,400 to your fund) | $8,400 |
Worked Example 2 — $120,000 Base Salary
| Gross | $120,000 |
| Income Tax (16% × $26,800 + 30% × $90,000) | −$31,288 |
| LITO | $0 |
| Medicare Levy (2%) | −$2,400 |
| Annual Take-Home | ~$86,312 |
| Monthly | ~$7,193/mo |
Salary Sacrifice to Super: A Powerful Strategy
Salary sacrifice lets you redirect pre-tax salary into super, reducing your taxable income:
Scenario: $120,000 salary, sacrifice $10,000 extra to super.
Taxable income drops to $110,000.
Tax saving: $10,000 × 30% marginal rate = $3,000 saved in income tax
The $10,000 in super is taxed at 15% within the fund: $1,500 contributions tax.
Net benefit: $3,000 − $1,500 = $1,500 extra in your pocket (or super) per $10,000 sacrificed.
Remember the $30,000/year concessional cap includes employer SG + salary sacrifice. At $120K salary: employer SG = $14,400, so you can sacrifice max ~$15,600 more.
Negative Gearing and Rental Properties
Many Australians own rental properties where interest costs exceed rental income — creating a tax loss that reduces taxable income and therefore PAYG withholding. You can apply to the ATO for a PAYG Withholding Variation to get this benefit in your weekly/fortnightly pay rather than waiting for your tax return at year end.
Calculate your Australian take-home pay
Open Take-Home Calculator →Source: ATO.gov.au. FY 2025-26. Not financial advice.
Official sources
Every rate and threshold in this guide is checked against the official government sources below. Always confirm figures for your own situation before filing.