Salary packaging can reduce the amount of tax you pay by paying for expenses using pre-tax income. While you may be saving on the 46.5% tax on each item if it was a fringe benefit, you only save what it would have cost you out of your personall after tax dollars, Forgetting the grossed-up part for the moment, me as a PBI employee does not pay tax on $16,050 of my salary that I otherwise would. Salary Packaging may or may not impact your family assistance payments from Centrelink. To achieve the same benefit without salary packaging you would need a gross salary of $0 Submit This calculator is for general use only and should not be used, relied on or treated as a substitute for specific professional advice relating to personal circumstances. For more information on the documents required please click here. "the gross salary that you would have to earn to purchase the benefit from after-tax dollars. Has anyone tried to use the meal entertainment card to pay for groceries or the movies? This type of salary packing is not some magical entitlement people get because the government sat down and said 'lets discriminate against people'. Actually loan payment is not ideal for salary packaging — the guide I have recommends against it. For most, a loan repayment set up is far easier to utilize in a salary packaging situation. And level for level, job for job, the pay is slightly lower for health non-medical employees than their counterparts in the public sector. Salary packaging your living expenses is the easiest way to save as these are expenses you already have. You are not able to interlink it with the 'Meal & entertainment' benefit. But don't think that because the transaction goes through, you have been able to 'get away with it'. Why Salary Packaging? Fair enough. A salary packaging arrangement is an arrangement between you and your employee, whereby your employee agrees to forgo part of their future entitlement to salary or wages in return for you providing them with … List the expenses you wish to salary package. Quite so. Newsflash, tax payers already pay those salaries. That can be in the form of rent, mortgage, or onto a debit card to spend on general living expenses (groceries and what-not). I don't specifically remember ...), public hospitals and public health facilities couldn't compete on salaries with the private for-profit health businesses. Most of the time employers who are allowed to offer (by the government) salary packaging for mortgages, credit payments etc are in the industries which pay their workers less than others. Download form. So your HECS debt, Centrelink, Family Tax, Medicare surcharge payment will be calculated using this new amount. NFP organisations benefit more than private or “profit” companies because they can offer non-cash benefits at a lower cost, making salary packaging much more attractive to employees. Salary packaging is an easy, cost-effective way to increase your take home pay by 6-12% and pay less income tax. Salary sacrifice is an arrangement to package or sacrifice part of an employee's salary in return for desired benefits. Salary packaged vehicles can be used for both business and personal use. Credit cards are better as you can use those for daily expenses. My car repayments have gone from $107.00 a week (out of pocket) down to $73.00. My partner has salary packaging, she works for a non-profit/medical research organisation. How to claim holiday and events. So whoever's done the maths on the car, it's "worth" $214 per fortnight in my package apparently. Your on a $100,000 and your saying your on peasant wage? A salary sacrifice arrangement is a way of paying for certain expenses or saving for your retirement using your pre-tax salary. Thus, cash benefits aren’t always practical. A family member works in the WA hospital system and said if it ever got canned 15,000 employees (or whatever the payroll is) will instantly demand a 10% payrise — and on sound grounds. If you pay or receive child maintenance, receive family tax benefits etc, Centrelink and other agencies may use the grossed up figure in their calculations. If they catch up with you, they will have the last laugh. Try our Novated Leasing Calculator. But why should the tax payer subsidise wages in certain sections of the job market? Your employer will pay If you work for an NFP organisation or looking to break into the industry, here are the salary packaging benefits you can get your hands on. Again, careful not to double-dip. If you make these payments through your Salary Packaging, you then can’t also legitimately claim them as a taxable deduction. To achieve the same benefit without salary packaging you would need a gross salary of $0 Submit This calculator is for general use only and should not be used, relied on or treated as a substitute for specific professional advice relating to personal circumstances. Your Salary Packaging Advantage Your saving off the Motor Vehicle Lease by Salary Packaging is: $5,436.95 % Increase in your equivalent salary packaging: 14.23 This website has advised me that I could save $5,436.95 in tax Unlike some SS providers in other states, in WA you can't use it for anything to do with accommodation or any other expenses related to the meal (taxi fares etc), nor can it be used for catering for private functions or any other entertaining at home – at least with Smart Salary anyway, I think Paywise might allow some of these? There are several kinds of salary packaging, your question is not very clear at all. Yep – same with other things like child support payments. The way it works is essentially like this – let's say you earn $60,000 per year, and $10,000 goes through salary packaging. Normally on that salary I'd pay around $17,000 per year in tax, leaving me with $58,000 net. So on pay day you pay less income tax and have more money for … As an employee of a public health organisation you can claim $9,095 of benefits. For those that use a special salary packaging credit card, you are also paying an administrative fee on the card. However ... and this is the big one. Give up whatever job it is you have now, go work for a charity for what is probably a MASSIVE pay cut and then tell me whether you still reckon salary packaging is fair or not. Travel AccommodationThis is separate from the above. Salary Packaging. I have this benefit at work and I'm curious on how other people use it to their advantage. All they needed was an unsecured personal loan. Please complete all sections of this form to claim a reimbursement for an expense you have already paid. Whilst salary packaging doesn’t change the amount of salary you’re paid, it allows you to pay for selected expenses before you’re taxed. Your Salary Packaging Advantage. Fancy a change of job? You can save on groceries, bills, clothing, and just about anything else. working in a hospital you are entitled to spend $9095 (ungrossed) pretax. Yes, I think they put a stop to it in WA but it is still available in Vic and NSW. Discover salary packaging Find out how PBI or HPC employees can reduce income tax and boost their take home pay. Nothing to get really excited over but still a saving. NFP staff may also benefit from funding mortgage or rent payments tax-free. For this year, she's asked HR to withhold more tax to cover this issue. So in theory the maximum saving or 'better off' you can be is 40%. That's what I do. So on a salary of $75,000 it's more or less equivalent to a pay rise of $8,000 per year. Charities, non-profit, churches. If you have any questions about the Proof of Expense Form or the payment process, please call the Endo Advantage™ Copay Assistance Program at 1-866-585-5591. NFP organisations with a charitable intention have tight budgets and scarce funds compared to private companies. The salary sacrificing benefits (part of salary packaging) comes into play when you choose to receive these non-cash benefits over a high cash salary. Employees may also salary package a motor vehicle, ie apply for a Novated Lease. The most common salary packaging items are superannuation, fringe benefits such as car or living allowance. In my situation, the credit card isn't better for us. No income tax is payable on this money. While you may be saving on the 46.5% tax on each item if it was a fringe benefit, you only save what it would have cost you out of your personall after tax dollars eg: if you package a 1,000 car while the the 15% tax bracket, you still only save 15% not 46.5%. Other regular fixed amount expenses, such as school fees and loan payments may also be paid for from your pre-tax dollars as part of a salary packaging arrangement. They can reasonably easily do anything that's work related, but it gets more complicated with FBT applying to most things. novated car lease $12k – 2013 kulger including fuel, insurance,the works. In one year I don't pay tax on about $31000 of my salary and I effectively get an early tax refund on about another $10000 worth of expenses! For each expense, you will need to provide proof of the expense. Actually my salary packaging seems to be incredibly simple – but then again I've worked in the charity / not for profit sector for most of my career, and I've come to have a pretty good understanding of how it works. Well you'd need to buy something with the loan I would think. The M & E option is still available to public health employees through salary sacrifice providers in WA, but is usually restricted to dining out at cafes/restaurants, meals in pubs/clubs and eating in at takeaway stores. But it can also seem quite complicated in the beginning. Hopefully the incoming gov ( whoever) will can this scam. – The reason for this is you have to understand what other consequence will happen when at tax time. Once the agreement between you and your employer is approved, part of your wage is ‘packaged’ into pre-tax dollars to pay for personal expenses. Governments are well aware of this and that it why it will never be changed. Depending on where you work you can make some massive deductions and basically not pay any tax. That's $3,250 extra for you. And not too many people are on that kind of tax bracket. The reason for this is you have to understand what other consequence will happen when at tax time. To the employee, that link has no direct benefit. What I find annoying though is that doctors who are earning big $$'s have access to it and get all the perks. Its still obvious a cleaner in private can earn less than a lecturer in non-profit. When she first got it, she got an ANZ credit card to use for general expenses. So yes, the more you earn the bigger the benefit. You are currently viewing: Get proof of … Ask your payroll department. Your forgetting the meal card, lappie, insurance, holiday accom, super, Nope, not forgetting those, just deliberately left it out as just getting the basics right was proving to be a complex enough topic as it was :). I work in a public hospital and salary packaging is available to us but only if we "DONATE" half of the benefit to the health service. Additional benefits and rewards Salary packaging is an Australian Taxation Office approved way of paying for some everyday items and living expenses with your pre-tax salary. So yeah, you could say that I take full advantage of salary packaging! Again look at the document I posted for worked examples. If you salary sacrificed the whole lot it'd mean you didn't pay any tax at all and I don't think that's fair either :). Yes mine is capped at the 9k as well..... if I can afford to ss more I should be allowed eg loan, bills, rent etc. It's pretty good having it go straight into the mortgage as we aren't "forced" to spend all the money that would have gone on the card. Those on here that actually have a clue about the system can I have some input. To discuss your salary packaging Savings and Apply, please Contact Remunerator on 1300 654 834. Not entirely correct. This could lower your taxable income and help you pay less tax. Maybe someone can enlighten me as to how novated leasing can be worthwhile? So whether you are in a low personal tax bracket earning $35,000 per year or a higher tax bracket earning $150,000 a year, the calculation of the value of a fringe benefit is worked out at that 1.8692 rate. Yep – both employers who I have worked for that offered salary packaging made sure we understood this and encouraged us to get independent financial advice. Looking around on Seek and other places where jobs are advertised, I am being paid a salary of around 60-70% in the charity sector of what I could get in private enterprise. Government has painted intself into a very tight corner here. So let's say that as a PBI employee I decide to package the full amount onto my home loan, or my rent. Salary packaging cards Our range of salary packaging cards give you the flexibility of spending your pre-tax salary where and when you want. Overall it means I pay less tax, which takes a bit of the sting out of the lower wages offered by charities and not-for-profits and helps level the playing field a little. I think from nearly 20 years of working for not-for-profits, most people see a benefit. Is that subject to FBT? OR - Contact 1800 501 703 for an Application kit. It doesnt affect things like that all They always consider your GROSS salary before any packaging to be your gross salary. Salary packaging is the easy way to boost your income. Both employees and employers can potentially benefit to the tune of thousands of dollars if salaries are set and structured in the right way. Employees may also salary package a motor vehicle, ie apply for a Novated Lease. This will allow you to sign up for salary packaging and the card online. To discuss your salary packaging Savings and Apply, please Contact Remunerator on 1300 654 834.