Can you salary package your rent?
Discover the tax benefits with Smart
05 August 2026
Wondering whether your rent could be included as part of your salary packaging benefits?
Short answer: Some Australians can salary package their rent, but it depends on where you work and who your employer is.
For eligible employees, salary packaging rent could be a simple way to reduce taxable income and potentially increase take-home pay.
In this guide, we'll explain:
- What salary packaging rent means
- Who may be eligible
- How it works
- What documents you may need
- Common questions about salary packaging rental payments
What is salary packaging rent?
Salary packaging rent is an arrangement where eligible employees allocate a portion of their pre-tax salary towards rental payments.
Normally, rent is paid from your after-tax income. With salary packaging, approved rental payments may be paid or reimbursed using pre-tax income, which can reduce your taxable salary.
The exact way salary packaging rent works can vary depending on:
- Your employer
- Your industry
- Your salary packaging provider
- Your eligibility under Australian Taxation Office (ATO) rules
As a result, not every employee will be able to salary package rent.
Can I salary package my rent?
Salary packaging rent could be an option for you if you work for an employer in the following sectors:
- Public hospitals
- Public health services
- Registered charities
- Not-for-profit organisations
- Public benevolent institutions (PBI)
The best way to determine whether rent can be included in your salary packaging arrangement is to check with your employer or salary packaging provider, such as SmartTM.
Eligible employees in the not-for-profit sector (for example charities, and most aged care and disability workers) can package up to $15,900 each FBT year (1 April - 31 March) for everyday living expenses, which can include rent payments.
For eligible healthcare workers in public or not-for-profit hospitals, this cap is $9,010 per FBT year.
For most other employees in the private sector, rental repayments are considered a private expense and cannot be salary packaged.
How does salary packaging rent work?
While arrangements vary between employers, the process generally follows these steps:
Step 1: Confirm you're eligible
Step 2: Provide supporting documents
Step 3: Set up the arrangement
Step 4: Receive reimbursement or claim payment
What are the potential benefits of salary packaging rent?
For eligible employees, salary packaging rent may offer several advantages.
Potential tax savings
Because salary packaging uses pre-tax income, it may reduce your taxable salary.
This can potentially result in:
- Lower income tax
- Increased take-home pay
- Greater value from your salary package
Individual outcomes vary based on income, tax rates and eligibility.
Simplified budgeting
Many salary packaging arrangements involve regular reimbursements, making it easier to manage recurring expenses like rent.
Making the most of available benefits
If your employer offers salary packaging, incorporating eligible rental payments may help you maximise the value available through your package.
Savings in action: How salary packaging rent could help stretch your salary
Meet Sarah, an aged care worker from Perth.
Sarah earns $75,000 a year and rents a unit close to work for $600 per week. Because she works for an eligible employer, she's able to salary package up to the current cap of $15,900 towards her rent each year^.
By using pre-tax income to cover part of her rental payments, Sarah reduces her taxable income and takes home more money each pay cycle.
Sarah's example
- Annual salary: $75,000
- Weekly rent: $600
- Annual rent paid: $31,200
- Amount salary packaged: $15,900
- Potential increase in take-home pay: $5,088 per year
- Equivalent to around $196 extra per fortnight
What does that mean in real life?
An extra $5,088 a year could help cover:
- More than 8 weeks' rent at $600 per week
- Household bills and groceries
- Family expenses and school costs
- Savings for a holiday or emergency fund
- Additional repayments towards other financial goals
For eligible employees, salary packaging rent could be a practical way to stretch your salary further. Instead of paying your entire rent from after-tax income, you may be able to use pre-tax income for a portion of your rental payments, potentially leaving more money in your pocket each year.
Sarah's result: By salary packaging the maximum eligible amount of her rent, Sarah could increase her take-home pay by $5,088 a year, which is like receiving a salary of $82,482 without changing jobs.
| Without salary packaging | With salary packaging | |
| Annual salary before tax | $75,000 | $75,000 |
| Pre-tax expenses | $0 | $15,900 |
| Taxable income | $75,000 | $59,100 |
| PAYG tax | $13,020 | $8,250 |
| Medicare levy | $1,500 | $1,182 |
| Annual salary after tax | $44,580 | $49,668 |
| Post-tax expenses | $15,900 | $0 |
| Net disposable income | $44,580 | $49,668 |
| Potential annual saving | $5,088 | |
| Potential fortnightly saving | $196 | |
| Equivalent salary | $82,482 | |
| % increase to take home pay | 11.41% | |
Can people who rent salary package other expenses?
Potentially, yes.
Depending on your employer and salary packaging program, you may be able to package other eligible expenses or benefits alongside rent.
Examples may include:
- Everyday living expenses
- Meal entertainment benefits
- Novated lease payments (salary packaging a car)
- Superannuation contributions
Available benefits vary between employers and salary packaging arrangements.
How Smart can help
Understanding salary packaging eligibility can sometimes feel complicated, particularly when different employers have access to different benefits.
Smart helps eligible employees navigate salary packaging and understand which benefits may be available through their workplace.
If your employer offers salary packaging with Smart, our team can help you understand:
- Available benefits
- Eligibility requirements
- Required documentation
- How to make the most of your package
Check your potential savings with Smart
Wondering how much you could save by salary packaging your rent?
Use the Smart Salary Packaging Calculator to see how salary packaging could help you stretch your salary and potentially increase your take-home pay.
Whether you're renting, paying a mortgage or exploring your salary packaging options, the calculator provides a personalised estimate based on your income and circumstances.
Try the Smart Salary Packaging Calculator and discover how much extra you could take home each pay cycle.
Frequently asked questions about salary packaging rent
Important information
This is general information only. Before entering into any salary packaging or novated leasing arrangement, you should consider your objectives, financial situation and needs, and obtain appropriate legal, tax, financial, or other professional advice based upon your own particular circumstances. This information is current as at July 2026.
^This saving example is for illustrative purposes only and is based on the income tax rates for the 2026/27 financial year. Your actual savings will depend on your income tax bracket, the GST processing method nominated by your employer, administration fees payable under your employer’s salary packaging plan and your personal circumstances. Before entering a salary packaging arrangement, you should obtain appropriate legal, financial or other professional advice.