He who sits “above the salt” is among the elect, honored, or socially acceptable; he who sits “below the salt” is just an also-ran, an ordinary person, perhaps even inferior in social standing.
The allusion is to the dining customs in the houses of the nobility and gentry in medieval days.
The saltcellar (properly “saler”), a large container, was placed about the center of the table and all guests of distinction were ranged in order of merit at the upper or master’s end of the table “above” the salt, or saltcellar.
The dependents, tenants, or persons of low degree sat “below” the salt, or at the lower end of the table.
The prolific writer, Bishop Joseph Hall, in Book II of his Satires (1597), tells us:
A gentle Squire would gladly entertaine
Into his House some trencher-chapelaine,
Some willing man that might instruct his Sons,
And that could stand to good Conditions:
First that He lie vpon the Truckle-bed,
Whiles his yong maister lieth ore his hed;
Second that he do, on no default,
Euer presume to sit aboue the salt.