How Does Salary Packaging Affect a Refinance?
Salary packaging, also called salary sacrifice, lets you pay for certain items from pre-tax income. It is common among hospital and health staff, charity and not-for-profit employees, and public sector workers. The effect on your payslip is a lower taxable salary, and that is where lending assessments diverge.
A lender that reads only the taxable figure will understate what you earn. A lender with a policy for packaging will add the benefit back, and in some cases recognise that it was received tax-free.
How Do Lenders Treat Each Type of Packaging?
| Packaged item | Common treatment |
|---|---|
| Living expenses or mortgage payments (health and charity employers) | Added back to income by lenders with a packaging policy; some gross it up because it is tax-free |
| Meal and entertainment benefits | Accepted by fewer lenders |
| Additional superannuation contributions | Voluntary contributions are often added back, since you could stop them |
| Novated lease | The lease payment is treated as an ongoing commitment until it ends |
| Laptops, tools and other one-off items | Usually ignored |
These are general patterns across the lending market, not rules. Each lender sets its own policy and changes it without notice, which is the practical reason to have the scenario checked against 50+ lenders before applying.
How Is a Novated Lease Counted?
A novated lease is a car lease paid by your employer from your salary. Lenders generally treat it as a debt, either by deducting the payments from your income or by adding the lease to your commitments. Either way it reduces borrowing capacity for as long as the lease runs. If the lease is close to ending, some lenders will disregard it, and paying it out before applying can be worth costing up.
Health workers are the clearest example. A hospital employee packaging the full tax-free cap looks thousands of dollars a year poorer on a taxable-income line than they really are. I send the full payslip and the packaging statement, explain each line to the lender, and choose a lender whose policy adds the benefit back. For a refinance with equity release, that can be the difference between approved and declined.
What Evidence Do You Need?
- Detailed payslips showing gross salary, each packaged deduction and year-to-date figures.
- Your income statement, which shows reportable fringe benefits.
- A statement from your salary packaging provider.
- For a novated lease, the lease agreement showing the payment and end date.
Should You Stop Salary Packaging Before You Refinance?
Not usually, and not without advice. Packaging often leaves you better off after tax, and the right lender will recognise it. Whether to change a packaging arrangement is a tax question for your accountant or provider. The lending answer is normally to pick a lender whose policy fits your pay.
Who Does This Affect Most?
Nurses, doctors and allied health staff in public and not-for-profit hospitals, charity workers, and anyone with a novated lease. Health roles are covered further in home loans for nurses and allied health, shift pay in overtime and shift income, and the overall process in refinancing on a PAYG salary.
General information only. It does not take your objectives, financial situation or needs into account. All lending is subject to lender assessment and approval. Fees and figures are typical ranges at 14 November 2026 and can change. Lend & Loan, Australian Credit Licence 511092.
