Not-for-Profit Salary Packaging: How It Works
For 2026-27 the concessional (before-tax) super contributions cap is $32,500, and it includes salary-sacrificed super plus your employer's super guarantee contributions. How far salary packaging not for profit arrangements go depends on your employer's tax status, your award or agreement, your employment type and what you choose to package.
This guide builds on our salary packaging guide.
Salary packaging not for profit: rates and rules
The table sets out what is fixed and what you must confirm with the ATO or your employer.
| Item | What the rule is | Where to confirm it |
|---|---|---|
| Concessional super cap | $32,500 for 2026-27, including salary-sacrificed super and employer contributions | ATO super contribution caps page |
| Super guarantee | 12% of ordinary time earnings for 2026-27, paid within 7 business days of payday | ATO super guarantee page |
| Minimum wage safety net | $26.44 per hour from 1 July 2026 for award-free employees | Fair Work Ombudsman minimum wage page |
| Award minimum rates | Rose 4.75% from the first full pay period starting on or after 1 July 2026 | Pay guide for your award |
| Tax concessions for benefits | Some not-for-profit employers can offer extra packaged benefits, with caps set by the ATO | ATO and the employer's tax status |
| Written agreement | Packaging should be agreed in writing and apply to future pay only | Employment contract and packaging policy |
Who salary packaging in a not-for-profit applies to
Eligibility depends on the employer's policy and tax status.
| Employment type | How salary packaging usually works | Key check |
|---|---|---|
| Full-time | Eligible under the employer's policy, with a package set from cash salary | Cash pay stays above the award minimum |
| Part-time | Eligible on a pro rata basis, based on the agreed hours | Check how caps apply to part-year or part-time pay |
| Casual | Depends on policy; the 25% loading is part of pay and should not be packaged away | Loading remains visible on the payslip |
| Labour hire worker | Usually not eligible for the host's scheme, as the provider is the employer | Ask the provider about its own options |
| Small employer under 15 employees | Can offer packaging if it runs payroll and provider arrangements | Check the cost of administration |
How to calculate salary packaging not for profit
Start with your gross pay, then test each packaged item against the rules in the table.
- Confirm your gross annual salary and your classification in the award or agreement.
- List the benefits you want to package, such as extra super, and get the ATO cap for each from your provider.
- For super, remember the 12% employer guarantee already counts towards the $32,500 cap.
- Subtract the packaged amount from future cash pay, and confirm the cash pay still meets the pay guide rate.
- Check the payslip shows the packaged items separately, with super paid on the correct base.
- Review the arrangement each 1 July, because caps and rates change.
Worked example of the super cap: the maximum super contribution base for 2026-27 is $270,830, so the maximum super guarantee is $32,499.60. That leaves less than a dollar of the $32,500 cap for extra super.
Employer obligations for salary packaging in a not-for-profit
- Put the packaging arrangement in writing and apply it only to pay not yet earned.
- Pay at least the pay guide rate in cash for each classification, and update rates after every 1 July.
- Pay super at 12% of ordinary time earnings for 2026-27, so it reaches the fund within 7 business days of payday, and do not reduce it because of packaging.
- Give payslips within 1 working day of payday that show packaged items and the cash pay remaining.
- Report payroll information to the ATO through Single Touch Payroll on or before each payday, and keep records for 7 years.
- Watch concessional contribution caps, since salary-sacrificed super and employer super share the same $32,500 limit.
Worker rights and what to do if your package looks wrong
- Compare your payslip with your packaging agreement and the Fair Work Ombudsman pay guide for your award.
- Write down the pay periods and amounts that look wrong, with your payslips as evidence.
- Raise the issue with payroll in writing and ask for a reply by a set date.
- If it is not fixed, contact the Fair Work Ombudsman on 13 13 94 for free help.
- For tax questions about caps or benefits, contact the ATO or a registered tax agent.
Common mistakes to avoid
- Packaging so much that cash pay falls below the award minimum, which can lead to an underpayment claim.
- Forgetting that salary-sacrificed super and employer super both count towards the $32,500 cap for 2026-27.
- Using the packaging to cut the 12% super guarantee, which is not allowed.
- Applying a new packaging arrangement to pay already earned, rather than future pay.
- Assuming every not-for-profit has the same concessions, when they depend on tax status and ATO rules.
- Skipping the annual 1 July review after rates and caps change.
Salary packaging not for profit FAQ
Is salary packaging worth it for not-for-profit employees?
It can be, because some packaged benefits are paid from pre-tax pay. The value depends on your tax rate, the benefit, the employer's status and any fees. Ask your provider for a written comparison and check ATO caps before agreeing.
Does salary sacrifice reduce my employer's super?
No. Employers must pay the 12% guarantee on ordinary time earnings for 2026-27 based on your pay before packaging. Salary-sacrificed super is extra, and both count towards the $32,500 concessional cap, so watch the combined total.
Can salary packaging take my pay below the award rate?
Your cash pay must still meet the minimum rate for your classification in the pay guide. If a package pushes your cash pay below that rate, raise it in writing and call the Fair Work Infoline on 13 13 94.
Can casual employees salary package?
It depends on the employer's policy. Casuals receive a 25% loading in place of paid leave, and that loading should stay visible on the payslip. Ask your payroll team whether casuals are included and how caps are tracked.
Getting salary packaging not for profit right
This is general information, not legal, tax or financial advice, so check the Fair Work Ombudsman, the ATO or an employment lawyer for your situation. For the wider picture, read our guide to salary packaging. If you are an employer who needs help building contracts and payroll processes, visit our recruitment page to talk to us.