Australian Wages Are Rising — Does Your Pay Packet Work Harder?
ABS data shows wages growing above 3% across 14 industries. Here's what rising wages and Labor's tax cuts mean for novated lease savings. Read more.
New ABS data released on 13 May 2026 shows annual nominal wages growing above three per cent in 14 of 18 industries — the longest consecutive streak of above-three-per-cent growth in more than 15 years. According to the Treasury Ministers' release [[Source 1]](https://ministers.treasury.gov.au/ministers/Jim-Chalmers-2022/media-releases/Higher-wages-in-more-industries-under-Labor), the Wage Price Index grew 0.8 per cent in the March quarter 2026, and Treasury's Budget forecasts upgrade the outlook further.
For most PAYG employees, a pay rise feels good — until you realise a chunk of it goes straight to the ATO. That's not cynicism, that's just how marginal income tax works in Australia. The good news is that rising wages make salary packaging tools like novated leasing more valuable, not less.
What this means for novated lease customers
When your gross salary increases, you move further into your marginal tax bracket. A novated lease works by redirecting a portion of your pre-tax salary to cover vehicle running costs — which means a higher income can translate into greater potential tax savings from the same lease arrangement.
The 2026 Budget also confirms ongoing tax cuts for workers, referenced in the same Treasury release [[Source 1]](https://ministers.treasury.gov.au/ministers/Jim-Chalmers-2022/media-releases/Higher-wages-in-more-industries-under-Labor). Combined with rising wages, this is a reasonable moment to revisit whether your current salary packaging setup is doing enough work. If you're driving a car — or planning to — and you haven't modelled a novated lease against your updated salary, you may be leaving real money on the table.
If you're considering an electric vehicle, the FBT exemption for eligible EVs under the Treasury Laws Amendment (Electric Car Discount) Act adds another layer of potential savings on top of wage-driven benefits. Wages growth doesn't automatically improve your take-home — but structuring your remuneration smartly can.
Common questions
Does a pay rise mean I should review my novated lease?
Yes — generally speaking. A higher gross salary can increase the tax benefit you get from pre-tax salary packaging, including a novated lease. It's worth modelling your specific situation before and after any wage increase.
What industries are seeing the strongest wage growth?
According to the ABS data cited by Treasury, 14 of 18 industries are now recording annual nominal wages growth above three per cent. The Treasury Ministers' release provides the full breakdown.
Do the Labor tax cuts affect novated lease calculations?
Tax cuts change the effective marginal rate you pay, which can shift the net benefit of pre-tax salary packaging. The overall impact depends on your specific income level — a personalised quote is the only way to get an accurate picture.
Is the EV FBT exemption still available in 2026?
Eligible battery electric and plug-in hybrid vehicles can still access the FBT exemption under current legislation. Check the ATO's current guidance and speak with a licensed novated lease provider to confirm your vehicle qualifies.
How does millarX differ from other novated lease providers?
millarX is ACL-licensed (569484), AFCA-registered, and holds FBAA membership. Customer funds are held in segregated accounts. We aim to be straightforward about what novated leasing actually costs and saves — no inflated projections.