Salary Packaging
Salary Packaging is the commonly used term to describe the ability for employees (via their employer) to obtain legitimate tax concessions on the costs of certain personal / private goods and services. Salary packaging allows for these costs to be deducted from an individual's wage or salary before it is taxed - reducing taxable income, BUT increasing your take home pay!. For example, if you were earning $3,000 per week gross (before tax) and you had a salary packaged car with payments of $500 per week, you would only pay tax on the difference; that is $2,500.
Salary packaging is, for many people a great way to give themselves a pay rise simply by restructuring permissable private expenses.
Whilst all salary packaging is governed by the Fringe Benefits Tax (FBT) legislation, it can be a very effective way to save money.
What expenses an employee can salary package through their Employer, will largely depend on their Employer's FBT categorisation. In respect of the private motor vehicle, the novated lease remains very relevant and is available to the vast majority of employees across all employer groups.
Following is a listing of common benefit options:
(This is not exhaustive and can be expanded to include managed non tax driven employee benefit options)
- Novated Lease
- Associate Lease
- Home Office Expenses
- Living Away from Home Allowance (LAFHA)
- Relocation Expenses
- Laptops / Notebook computers/PDAs etc
- All otherwise deductible classified items
- Professional membership
- Airport lounge membership
- Self Education Expenses
- In House Child care
- Financial Advisor fees
- Remote Area Housing Allowance
- Car Parking
- Top Up Superannuation (above SGC)
- Life / Disability/Income Protection Insurance
Want more information? Simply click here to book a call, phone us on 1300 885 074 or email info@aspirebenefits.com.au.