Public Hospital Salary Packaging: the $9,010 Cap
Staff of public hospitals, not-for-profit hospitals and public ambulance services can salary package $9 010 a year of everyday expenses with no fringe benefits tax. That figure is the $17 000 grossed-up cap in the FBT law, divided by the 1.8868 gross-up rate. Rent, mortgage repayments, loans, credit cards and bills are paid from pre-tax salary, so you save your marginal rate of income tax plus the Medicare levy on the whole amount. A graduate nurse on $78 000 saves $2 883 a year. A senior nurse or paramedic on $115 000 using the cap and the $2 650 meal entertainment card saves $3 731. A registrar on $150 000 saves $3 514 from the general cap alone, every dollar of it saved at 37% plus the levy. The cap runs with the FBT year, from 1 April 2026 to 31 March 2027. Check your own figure below.
Hospital salary packaging: what $9 010 is worth
Tax saved per year
$2 883
Your full case: salary packaging calculator.
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Who counts as a hospital employer
The FBT exemption capped at $17 000 applies to employees of public hospitals, not-for-profit hospitals and public ambulance services. It covers everyone the employer pays, not only clinical staff: nurses, midwives, doctors, allied health, paramedics, administrators, cleaners and kitchen staff. State health departments that employ hospital staff directly generally run the packaging through a contracted provider. A for-profit private hospital is outside the concession.
Hospital staff, four cases
| Role and salary | Packaged | Saving per year | Per fortnight |
|---|---|---|---|
| Part-time ward clerk, $42 000 | $9 010 | $1 919 | $74 |
| Graduate nurse, $78 000 | $9 010 | $2 883 | $111 |
| Clinical nurse consultant, $115 000, with meals | $11 660 | $3 731 | $144 |
| Registrar, $150 000 | $9 010 | $3 514 | $135 |
The ward clerk's packaged amount comes partly out of income taxed at 15%, so the saving is smaller per dollar. The registrar's salary of $150 000 falls to $140 990 after packaging, still above the $135 000 threshold, so the whole amount is saved at 37% plus the levy.
How the cap is used in practice
- Living expenses card or bill payments. The provider deducts an equal amount from each pay and pays your mortgage, rent or bills, or loads a card.
- Meal entertainment card. A second card for restaurant meals with others and holiday accommodation, up to $2 650. See meal entertainment.
- A car on top. A novated lease is packaged separately from the cap and has its own FBT treatment; an eligible electric car is FBT-free. See the novated lease calculator.
- Super on top. Salary sacrifice to super is also outside the cap, up to the $32 500 concessional cap. See the salary sacrifice super calculator.
The side effect on HELP
The $9 010 you package is reported on your income statement as $17 000 of reportable fringe benefits. HELP repayments are worked out on taxable income plus that amount, so packaging does not lower them and the reported figure is larger than the amount you packaged. For the graduate nurse with a HELP debt, the compulsory repayment is $1 271 on $78 000 without packaging and $2 469 with it, because repayment income becomes $85 990. That $1 199 comes off the $2 883 of tax saved, leaving $1 685 a year: still worth it, but far less than packaging brochures suggest. The extra repayment is not lost, it reduces the debt faster.
Paramedics and ambulance services
Public ambulance services are in the same group as hospitals, so paramedics, patient transport officers and call-centre staff of a state ambulance service have the same $9 010 cap and $2 650 meal entertainment cap. For-profit patient transport companies are ordinary employers. Paramedics with large shift penalties and overtime often sit in the 37% band for part of the year: the packaged amount comes off the top of taxable income, so the saving is measured at the highest rate reached, not at the base salary rate.
Junior doctors on rotation should check whether each health service is a separate employer: a new employer starts a new cap, while rotations within the same employer share one cap, so keep a note of what has been packaged since 1 April.
Changing hospitals or leaving during the FBT year
The cap belongs to each employment. Move from one public hospital to another and the new employer starts a fresh cap, although your provider may limit the amount to the pays left before 31 March. Leave the health system and any balance in your packaging account is paid out or applied to bills before your final pay. Benefits already received stay reportable for that FBT year.
Sources
Frequently Asked Questions
How much can nurses salary package in 2026-27?
I work at two public hospitals. Do I get two caps?
Do private hospital staff get the hospital cap?
When does the hospital cap reset?
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