Salary Packaging for Public Hospital Doctors

Just started as a junior doctor? Congratulations! You’ve landed your first job. The hours can be long, the learning curve is steep, and there’s plenty to take in. But there’s one financial benefit many new doctors don’t hear much about: salary packaging. If you work in a public hospital, it could put thousands of extra dollars in your pocket each year—without working a single extra shift.

What is salary packaging?

Salary packaging (also called salary sacrificing) lets you pay for certain everyday expenses with pre-tax income instead of after-tax income.

Because part of your salary is used before tax is calculated, your taxable income is lower. Lower taxable income generally means less tax and more take-home pay.

If you work for a public hospital, employer, you can usually package:

• Up to $9,010 each year for living expenses such as rent, your mortgage, credit card repayments or personal loans.
• Up to $2,650 each year for meal entertainment, including restaurants, cafés and eligible accommodation such as hotels.

Instead of: Earn → Pay tax → Spend your money

You do this: Earn → Pay allowable expenses before tax → Pay less tax

You’re spending money you were going to spend anyway—just in a more tax-effective way.

How much could you save?

Imagine two junior doctors earning exactly the same salary. Both earn $3,000 per fortnight.

• Doctor A doesn’t salary package and takes home about $2,300 after tax.
• Doctor B salary packages $500 each fortnight and ends up taking home around $2,500.

That’s roughly $200 extra every fortnight, or around $5,000 a year, simply by using a benefit available through their employer.  

And remember, If you rotate between eligible public hospitals, you may be able to salary package separately with each employer and double your tax savings.

If you want to know how much you can save, you can use this calculator with one of the providers Maxia. 

Can you salary package at more than one hospital?

Yes!  If you rotate between eligible public hospitals, you may be able to salary package separately with each employer and double your tax savings.  

The important thing to remember is that your salary packaging doesn’t automatically follow you when you move hospitals. Each time you start with a new employer, you’ll usually need to set it up again.

How do you set it up?

Once you’ve accepted your job and completed your onboarding paperwork, you’ll be enrolled in the hospital’s payroll system. At this point, you’re eligible to salary package—but it won’t happen automatically.

Step 1 : Ask HR or Payroll who the salary packaging provider is

Step 2: Register with the provider

Step 3: Decide what you want to package

Most junior doctors package:

Living expenses

• Rent
• Mortgage repayments
• Credit card repayments
• Personal loan repayments

Meal entertainment

• Restaurants
• Cafés
• Hotels
• Eligible accommodation

You don’t need to change what you’re spending money on—you simply tell the provider which eligible expenses you want reimbursed.

Step 4: Choose how you’ll claim

Most providers offer two options.

Option 1 – Reimbursement

You pay the expense yourself. Upload your receipt or bank statement. The provider reimburses you through payroll using pre-tax salary This is popular for: mortgage, rent, loan repayments, credit card repayments.

Option 2 – Salary packaging card

The provider gives you a Visa or Mastercard. Pre-tax money is loaded onto the card each pay cycle.
You simply tap the card when paying for eligible expenses. This is popular for: restaurants,cafés, meal entertainment.

Step 5: Decide how much to package

The provider will usually calculate this for you. For most public hospital doctors, they’ll spread the maximum benefit evenly across your pays during the FBT year. You don’t usually have to work this out yourself.

Step 6: Check your first payslip

After everything is set up, check that:salary packaging deductions have started, reimbursements are occurring correctly and the amounts look reasonable. If something looks wrong, contact the provider immediately.

Step 7: Repeat the process when you rotate hospitals

This is the step many junior doctors miss. When you move to another public hospital that is a different employer, your old salary packaging usually stops , your new hospital may use a different provider, you need to enrol again. Don’t assume it transfers automatically.

Common mistakes to avoid

1. Waiting too long

Salary packaging isn’t backdated. The sooner you set it up after starting a new job, the sooner you start saving. In Australia, interns usually start work in January. Why this matters for salary packaging:

This creates an interesting opportunity because the Fringe Benefits Tax (FBT) year runs from 1 April to 31 March, not the calendar year.

An intern starting in January has approximately:

• January to March: About 3 months before the current FBT year ends on 31 March.
• 1 April onwards: A fresh set of salary packaging caps becomes available.

For example, if an intern starts on 19 January:

• 19 January – 31 March: They can generally access the remaining salary packaging benefits available in the current FBT year.
• 1 April: Their caps reset.
• 1 April – 31 March (next year): They can access the full annual caps again.

This means an intern who starts in January may be able to receive salary packaging benefits across two FBT years within their first few months of employment, provided their employer’s salary packaging arrangements allow it and they have enough eligible salary and expenses to package.

For doctors starting in January, it’s often worth setting up salary packaging immediately, rather than waiting until the new FBT year begins, so they don’t miss out on the remaining entitlement before 31 March. This is a point that many new interns are unaware of and can result in meaningful tax savings in their first year of work.

2. Forgetting when you change employers

When you change  employers, make sure you set up your new salary packing arrangements because the original salary packaging arrangement does not trannsfer to the new employer.

3. Having a HECS-HELP debt

This catches a lot of junior doctors. Salary packaging reduces your taxable income, but it doesn’t reduce the income the ATO uses for HECS-HELP. So you may get a tax bill if not enough tax is withheld during the year.
The fix is simple: ask payroll to withhold a bit extra tax each pay so your HECS is spread out instead of coming as a surprise at tax time. 

4. Salary sacrificing into super without advice

Salary packaging  to super can be a great strategy, but it isn’t always the best option. Depending on your circumstances, making personal deductible super contributions may achieve a similar result while giving you more flexibility.

When should you review your salary packaging?

Review it whenever: you move hospitals, your income changes, your roster changes, you’re getting close to your annual limit. A quick review can help you avoid missing benefits or paying more tax than necessary

How Tolevsky Partners can help

At Tolevsky Partners, we specialise in helping doctors make the most of salary packaging and the tax rules that come with it.

We can help you:

• Set up salary packaging correctly from day one.
• Understand how HECS-HELP is affected.
• Navigate hospital rotations.
• Maximise your tax savings.
• Take the stress out of tax and financial planning.

If you’d like to see how salary packaging applies to your situation, contact us for  a complimentary consultation . .