Salary Packaging for Healthcare Workers: The Simple Breakdown
- asperharry
- Feb 20
- 3 min read
Alright, let’s talk about salary packaging—the thing I knew existed for ages but had *zero* clue how it actually worked. If you're a healthcare worker (or work in the public sector), you’ve probably heard of it too. It sounds complicated, but once you get the hang of it, it’s actually a pretty easy way to save a bit on tax.
After three years of salary packaging as a junior doctor, here’s everything I’ve learned—explained in the simplest way possible.
What Happens Without Salary Packaging?
Normally, you work, earn money, get taxed, and then whatever’s left gets transferred to your bank account. That’s your after-tax income—the money you actually get to spend.
What Happens With Salary Packaging?
With salary packaging, part of your income bypasses tax and goes straight into a salary packaging account before it even hits your bank. You don’t get to salary package all of your income, just a specific portion (up to a set limit).
Your employer partners with a salary packaging company, and that’s where your allocated money gets sent. Once it’s in your salary packaging account, you can use it in two ways:
Get a Salary Packaging Card – A special debit card that you can use to spend your pre-tax salary on eligible expenses.
Reimburse Yourself – Spend your own money first, submit receipts, and get reimbursed from your salary packaging account.
I personally prefer the reimbursement method—it’s easier, and I don’t have to bother setting up another card... but it's up to you how to organise it.
What Can You Use Salary Packaging For?
You can’t just use this money on anything—it has to be on approved expenses. The two main categories are:
Living Expenses– Things like rent, mortgage repayments, groceries, utility bills, and household purchases (up to $9,000 per year).
Meals & Entertainment – Restaurant meals, event tickets, and holiday accommodation (up to $2,600 per year).
There are also other things like additional super contributions, work-related expenses, and even novated car leases, but the above two are the most common.
How Do You Actually Use It?
If you go the reimbursement route (like I do), here’s how it works:
Spend your own money on an eligible expense (e.g., groceries, rent, dining out).
Take a photo of the receipt and upload it to the salary packaging company’s website or app.
Get reimbursed—the money gets transferred from your salary packaging account to your bank.
If you use the card method, you just tap your salary packaging card instead of your regular bank card.
How Much Can You Save?
On average, salary packaging can save you around $2,000 per year in tax. Not life-changing, but it’s literally free money for expenses you’re already paying for.
Most people in healthcare use salary packaging because there’s no real downside—you’re just keeping more of your income instead of giving it away in tax.
Who Can Salary Package?
Salary packaging is available to:
Healthcare workers in public hospitals (doctors, nurses, allied health, etc.)
Employees in non-profits and charities
Some government sector employees
People in the private sector can still do limited salary packaging, but it’s usually not as beneficial as it is for public workers.
Salary packaging isn’t a loophole—it’s just a small tax benefit for public healthcare workers and other eligible employees. The government knows about it, and they allow it as a way to make up for lower public sector wages compared to private jobs.
If you work in healthcare and aren’t salary packaging, you’re basically giving up free money. It’s not complicated once you get the hang of it, and after setting it up, it runs automatically.
Too confusing via text? let me talk you through it in a video instead:
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