Still have questions about Salary Packaing? Read over our helpful FAQ's or Contact Us and we can answer any questions you may have.
What is Salary Packaging
Salary Packaging is an agreement with your employer to forego part of your salary for a nominated benefit. This essentially allows you to pay for items from your before-tax income. Salary packaging is popular because it has the ability to reduce your taxable income so you pay less income tax.
What can I Salary Package?
Eligible items for you to Salary Package will be determined by your employer and their Fringe Benefits Tax (FBT) status. Typically, the benefits below are available to all organisations:
Motor vehicles (via a Novated Lease)
Portable electronic devices such as laptops
Additional superannuation contributions
Airport lounge memberships
Income protection insurance
Professional subscriptions & memberships
Financial advice fees
Work related self-education expenses
Relocation expenses
Home office expenses
In-house benefits such as childcare
Not-for-profit organisations which have a FBT rebate or exemption may also have access to the following benefits, subject to a capped limit:
General living expenses
Mortgage repayments
Rental payments
Personal loan repayments
School fees
Meal entertainment
Venue hire and accommodation
What is Fringe Benefits Tax?
Fringe Benefits Tax (FBT) is a tax employers pay on certain benefits they provide to employees that are in lieu of cash salary or wages, such as an item you have chosen to salary package from your before-tax income. While FBT is the responsibility of the employer the cost is typically passed to the employee and deducted alongside the chosen benefit. We will advise you if your chosen benefit attracts FBT but most salary packaging benefits have a concessional FBT treatment, which means more disposable income for you.
What are capped limits?
Employees of certain not-for-profit organisations are eligible to salary package specific benefits up to a capped limit set by the ATO. Anything below this limit does not incur FBT. In the case of a FBT rebatable organisation, FBT will be payable but at a reduced amount.
These limits essentially mean that if you work for a not-for-profit organisation which has a FBT exemption or rebate, you will be able to salary package up to $15,900 per FBT year from your before-tax income.
If you are in the health industry and your organisation has a FBT exemption, you will be able to salary package up to $9,010 per FBT year from your before-tax income.
If your organisation has a FBT exemption or rebate, you may also be able to salary package meal entertainment and venue hire/accommodation benefits up to $2,650 per FBT year (combined cap).
What happens if I start partway through the FBT year?
You may be able to accelerate your payments and Salary Package up to the capped limit, even if you start partway through the year. This will allow you to maximise your tax savings.
I have a HECS/HELP debt, can I still salary package?
Yes, you can still Salary Package if you have a HECS/HELP debt but if the packaged benefit attracts FBT this may be included in your HECS-HELP Repayment Income (HRI) for the purposes of calculating your HECS/HELP repayment rate. As a result of Salary Packaging, you may be required to make higher repayments. On the plus side, you will pay off your HECS/HELP debt sooner!
If you commence a salary packaging arrangement, be sure to speak with your payroll to make sure they are deducting the correct amount from your pay to avoid a shortfall at tax time.
I receive benefits from Centrelink, will these by affected by salary packaging?
If you work for a FBT exempt or rebatable organisation, family assistance payments such as Family Tax Benefit, Child Care Benefit and Parental Leave Pay may be affected. You still need to report your Salary Packaging (reportable fringe benefits) to Centrelink but they will be adjusted.
However, if you claim child support, your reportable fringe benefits will be included in your adjusted taxable income so entering into a Salary Packaging arrangement may impact your payments.
We recommend you seek the appropriate advice from a financial advisor or tax accountant specific to your circumstance.
How do I set up salary packaging?
Simply contact the FleetPlus Salary Packaging team on 1300 353 381 and we will provide you with the application forms to complete. Once we have received all the required documentation, we will liaise with your payroll to commence the deductions from your salary. If the benefit is required to be paid back to you, we will process the funds to your nominated bank account.
