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ATO-Approved Salary Packaging helps not-for-profit employees reduce taxable income, save on tax and take home more. Learn how salary packaging works today. Salary packaging also called salary sacrificing lets you use part of your pre-tax income to pay for everyday expenses. You pay less tax, and keep more of what you earn. When you package, money for certain expenses called benefits is set aside from your salary before tax is taken out. You then only pay tax on the remaining portion of your salary. In easy terms: your packaged income is deducted first, and you’re taxed on what’s left second.