Salary sacrifice is particularly useful for the SAR/EMS companies which are legally non-profit organisations. A percentage of the employee's pay (usually around 30%)is placed in a special account by the employer. The employee can draw on this to pay specified expenses-usually mortgage, car running costs, and school fees. As leading edge correctly states, this portion of the salary is not taxed-it doesn't even appear on your group certificate if I remember correctly. In effect you are only getting taxed on say 70% of your true salary. It is particularly useful for non-profit organisations because these employers do not have to pay fringe benefits tax on this "extra" bit of salary. The employee does not really gain much because most of the EMS companies simply pay reduced salaries on the basis that the employee will gain from the tax break because of salary sacrifice. Hence an EMS pilot's taxable income might be say $50,000 with a further $15000 in the salary sacrifice account. This $65000 would be equivalent to the low 70's in 'normal' salary. The scheme only works if the income tax rate is high and you are paying off a house. Like I said, it really just saves the employer money in salaries-which is not a bad thing for the EMS companies which depend on public support and sponsorship.