How We Calculate the Salary Packaging Calculator

Rules & Data Version

Rules version: 2025–26 (FBT year ending 31 March 2026) Based on ATO published FBT rates, caps and grossing-up factors as at 1 May 2026

CCSChecker provides an independent estimate only. Actual tax outcomes depend on your full financial circumstances. Consult your salary packaging provider and a registered tax agent for advice specific to your situation.

What the Salary Packaging Calculator Models

The calculator estimates:

• Adjusted Taxable Income (ATI) before and after packaging — the income figure used for CCS, FTB, HELP and MLS
• Income tax saving — reduction in personal income tax from packaging pre-tax salary
• Reportable Fringe Benefits Amount (RFBA) — the grossed-up amount shown on your income statement
• Net tax position — tax saving minus admin fees and any associated costs
• HELP repayment impact — change in annual HELP compulsory repayment
• Medicare Levy Surcharge (MLS) — threshold crossings where applicable
• NSW Health tax-saving share — 50/50 standard or HSU 100% arrangements

Employer Types

The calculator supports three employer categories:

Only hospital and PBI employers qualify as exempt employers under the FBT Act. For these employers, benefits up to the relevant cap are exempt from FBT, and only 53% of RFBA is added back to ATI for income-tested purposes (CCS, FTB). For standard employers, the full RFBA adds back at 100%.

Living Expenses Cap

The living expenses (Type 2 exempt) cap for 2025–26:

• Hospital/health employers: $9,010 per FBT year
• PBI employers: $15,900 per FBT year

Amounts packaged above the cap become taxable and are not modelled separately by this calculator. The calculator uses your entered living expenses amount as-entered and assumes it is within the applicable cap.

Meal Entertainment and Holiday Accommodation

A separate annual cap of $2,650 applies to meal entertainment and holiday accommodation benefits combined. This cap is a practical limit used in CCSChecker's model; your employer's cap may differ.

Meal entertainment RFBA is calculated using the same grossing-up factor as living expenses.

RFBA Calculation (Grossing Up)

Fringe benefits are reported on your income statement at their grossed-up taxable value. For Type 2 benefits (most salary packaged living expenses):

Gross-up factor: 1.8868 (Type 2, FBT rate 47%)

Formula:

RFBA = Packaged amount (excl. admin fee) × 1.8868

The admin fee is excluded from the grossed-up amount because it is a cost to the employee, not a benefit received.

ATI Impact

Exempt Employers (Hospital, PBI)

For CCS, FTB, and HELP purposes:

ATI add-back = RFBA × 0.53

This is the Centrelink-adjusted RFBA. The full RFBA figure still applies for HELP and MLS calculations — CCSChecker displays both.

Proposed ATI = Baseline ATI − Packaged salary + (RFBA × 0.53)

Where packaged salary reduces your taxable income, but 53% of the grossed-up benefit is added back. In most cases this results in a net ATI reduction, which improves CCS, FTB, and reduces HELP repayments.

Standard Employers

For standard employers, RFBA adds back at 100%:

Proposed ATI = Baseline ATI − Packaged salary + RFBA

In most cases the ATI change is neutral or negative for standard employers because the grossed-up amount exceeds the packaged salary reduction. Standard employer packaging is primarily a cashflow tool, not an ATI reduction tool.

Income Tax Saving

Income tax saving is estimated using 2025–26 resident income tax brackets plus LITO:

Tax saving = Tax on baseline ATI − Tax on (baseline ATI − net packaged salary)

Where net packaged salary = living expenses amount + meal entertainment amount (before grossing up, after admin fee).

This is a simplified calculation. CCSChecker:

• Applies standard resident marginal rates
• Includes Low Income Tax Offset (LITO)
• Estimates Medicare levy at 2%
• Does not model low-income Medicare levy shade-ins or family reductions
• Does not model LMITO (no longer applicable from 2024–25)

Admin Fee

The admin fee charged by your packaging provider:

• Reduces the net tax saving (subtracted from income tax saving to produce net tax position)
• Does not affect the RFBA calculation (not included in grossed-up amount)
• Is not tax-deductible in most circumstances

HELP Repayment Impact

HELP compulsory repayments are income-tested on Repayment Income, which for packaged employees equals:

Repayment income = Taxable income + Full RFBA (at 100%, not 53%)

CCSChecker estimates the change in annual HELP repayment using 2025–26 HELP repayment thresholds and rates. For exempt employers, packaging typically reduces taxable income but increases RFBA added back at 100% — the net HELP impact depends on the relative sizes.

Medicare Levy Surcharge

MLS applies at 1.0–1.5% where a taxpayer does not hold private hospital cover and their income exceeds the MLS threshold ($93,000 single / $186,000 family in 2025–26).

For MLS purposes, income is assessed against Repayment Income (taxable + full RFBA). CCSChecker flags where packaging moves income across an MLS threshold.

NSW Health Tax-Saving Share Arrangements

Standard 50/50 Share

NSW Health commonly operates a 50/50 split of the income tax saving between the employee and NSW Health:

Employee keeps = Gross tax saving × 50%

HSU-Covered Award Employee (100% share)

Employees covered by certain Health Services Union awards may retain 100% of the tax saving:

Employee keeps = Gross tax saving × 100%

Custom Share

The calculator also accepts a custom employee share percentage.

In all cases, the gross RFBA and ATI impact remain the same — only the net personal cash benefit changes.

CCS Link

After calculating your proposed ATI, CCSChecker provides a direct link to the CCS calculator pre-filled with your new ATI. This allows you to immediately see how packaging affects your Child Care Subsidy percentage and weekly out-of-pocket costs.

What the Calculator Does Not Model

• FBT on amounts above the relevant cap
• Salary packaging of vehicles (novated leases — use the EV Calculator for that)
• Remote area benefits
• Self-education expenses
• Workplace giving
• Benefits with different grossing-up factors (Type 1 vs Type 2 beyond standard living expenses)
• Tax on redemption of packaged amounts
• Impact on income-tested government payments other than CCS, FTB, HELP and MLS

Disclaimer

This estimate is for planning purposes only. It is not financial, tax, or legal advice. Salary packaging rules, caps and FBT rates can change. Always confirm your specific packaging arrangements with your employer's packaging provider and consult a registered tax agent for personalised tax advice.