Are you looking for a tax effective way to do more with your money? You may have found it!
What is Salary Packaging?
Salary packaging (also known as salary sacrifice) is an arrangement between you and your employer, where you pay for some items or services straight from your pre-tax salary. You can salary package computers, cars, childcare and super, to name a few and this can reduce your taxable income and put more money in your pocket.
Your employer then has to pay fringe benefits tax (FBT) on the benefits provided to you. Some of these benefits will be listed on your end of year payment summary and are used to assess your Medicare levy surcharge, tax offsets, child support payments and other government benefits.
What can be Salary Packaged?
- Health insurance
- Loans (usually for a car)
- School fees
- Childcare fees
- Meals and Entertainment
- Other personal expenses
What are some Salary Packaging Strategies?
- Planning salary packages to minimise tax
- Increase savings from reduced Fringe Tax Benefits (FBT)
- Concessional FBT
- Excluded benefits
- Exempt FBT
- Remote area benefits