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Public hospitals are FBT-exempt up to a $17,000 grossed-up cap per employee, roughly $9,010 of actual pre-tax benefits a year 1. You nominate expenses, they come out before tax, and you keep the difference — except in NSW, where the tax saving is split 50/50 with the health agency by policy directive 2.
The mechanism. Public hospitals sit in the FBT-exempt category, with a capping threshold of $17,000 grossed-up per employee per FBT year 1. Below that cap, benefits your employer provides on your behalf attract no fringe benefits tax, which is why a hospital can pay roughly $9,010 a year of your living costs out of pre-tax salary. It is a federal concession designed to keep people in the public system, not a perk your hospital invented 3. Meal entertainment sits in a separate, smaller cap.
What to package. Rent, mortgage repayments on your own home, childcare and credit card bills are the standard picks — because they are not otherwise tax-deductible 4. Anything you could claim on your tax return (courses, college fees, professional subscriptions, equipment) is generally better claimed there and left out of packaging, so you do not burn the cap on something you would have got back anyway 4.
The NSW catch. NSW Health's salary packaging policy directive splits the tax saving, and the administrative fee, 50/50 between the employee and the health agency 2. NSW is the only jurisdiction that does this, and its removal has been on ASMOF's log of claims in the current award negotiations 3. It is still worth doing — half a saving beats none.
Novated leases are a separate question. They are sold hard in hospital foyers and are the single most regretted packaging decision on the sub: people report paying close to double the value of the car over the lease, with an inflexible provider if your circumstances change 5. Package your rent first; treat a car as a purchase decision, not a tax decision.
Start early. The cap is per FBT year (1 April to 31 March) and does not carry over, so signing up in February wastes most of a year's allowance 6.
r/ausjdocs — community view, not policy; verbatim, cautionary beside positive where both exist, every quote linked to the comment.
Novated lease was the worst financial choice I've ever made. Essentially I'll be paying double the worth of the car by the end of the lease.
Save salary packaging for expenses otherwise not deductible.
Salary packaging is a benefit given to us by the federal govt. Its designed to incentivize us to stay working in the public system.
The removal of the 50% "shared saving" is in ASMOF's log of claims as part of our negotiations.
Asked 55 times on r/ausjdocs (title-regex count) · encoded by hand from the numbered sources, retrieved 12 Sept 2026; no AI wrote any of it. how the count was made
asked_count = posts in r_ausjdocs_posts.jsonl (19,145 posts, 2022-09-13 to 2026-09-12) whose title matches /salary packag|novated|\bFBT\b|meal entertainment|remuneration services|Smartsalary/i. Quotes are the highest-scoring comments across the packaging threads, chosen to cover what the concession is, the NSW split, the deduction-versus-packaging rule, and the novated-lease warning.