WHAT IS SALARY PACKAGING?
The smart way to maximise your income
Salary packaging is an ATO-approved employee benefit that affords you the freedom of tax-free spending. But it can also seem quite complicated in the beginning.
Let’s tackle the tax-free thing first up. Ordinarily, you get paid in return for work but before this happens, your employer deducts income tax. The remaining balance is then deposited into your account. Then you pay for all your living expenses, and, if you’re lucky, you put a little away for a rainy – or sunny – day.
Salary packaging flips this around: your employer pays you the same salary but you pay for selected expenses before the tax is taken out, rather than after. This could reduce your taxable income and give you more money to spend on the things you want.
SALARY PACKAGING EXPLAINED
What types of expenses can I salary package?
Depending on your employer, the industry you work in and certain individual circumstances, the benefits you may be able to package include car repayments, work-related devices, mortgage and rent payments and everyday expenses including utility bills. Most people can save tax by salary packaging a few everyday expenses.
How much could salary packaging save me?
A quick salary packaging example
Jack earns $60,000 per year. He works for a charity, and his employer allows him to salary package these everyday items up to a cap of $15,900 per FBT year. By salary packaging up to the full $15,900 permitted, he could be up to $4,857 better off each FBT year. (Please note that Jack’s ability to salary package, and to what amount, is dependent on his employer’s salary packaging policy. Please contact us to discuss the amount you may be able to salary package given your individual circumstances.)
How much could salary packaging save me?
Use our tools and calculator for a guide to your potential savings through salary packaging.
Keen to find out more about salary packaging the RemServ way?
Whether you’re ready to get started or need more information, we’re here to help.