Salary packaging is a way of structuring your employee's income to provide tax benefits that are permitted by the Australian Tax Office (ATO). It's an arrangement between an employer and employee that allows workers to pay for certain items and services from their pre-tax salary. As a result, this reduces their taxable income and ultimately puts more money in their pocket.
Setting up salary packaging through Chifley comes with no or very little cost to the employer. In fact, you may save money by offering such a service. If you're keen to find out more, the Chifley team will be more than happy to discuss the options with you.
Benefits to you and your employees
Salary packaging delivers benefits for you and your employees. As an employer, you
- are providing an employee benefit with real monetary value, which can increase their take-home pay.
- are improving your ability to attract and retain good staff, while increasing employee satisfaction and wellbeing.
- may pay less payroll tax because your wage bill is reduced by the packaged amounts, freeing up funds to spend elsewhere in your business
What can be packaged?
A wide range of items and services can be salary packaged, depending on the industry. We specialise in providing services to rural and remote areas, unlocking the benefits available to employers and employees provided under the Fringe Benefits Tax Assessment Act 1986 and current tax legislation. Some worth considering include:
Remote area benefits
Employees living and working in an area deemed to be remote by the ATO may be eligible to:
- Pay 50% of rent or mortgage interest from pre-tax income
- Claim 50% of electricity and gas bills
- Claim 50% of holiday travel costs from a remote area.
Employees who relocate to take up a role with their employer may be eligible for benefits that include:
- Pay up to 12 months rent from pre-tax income
- Claim moving costs
- Claim expenses relating to the sale of home and purchase of a new home in your new location.
Salary Packaging car expenses is a great way to reduce tax. The two most common arrangements are:
Buying a new car
Novated Leasing is one of the most cost effective ways of buying a new car. All the costs are paid out of pre-tax salary including lease payments, fuel, tyres, insurance and registration. Payments are structured to eliminate any FBT.
Packaging an existing car
Associate Leases enable employees to package the running costs and depreciation of up to three currently owned vehicles in any one family subject to certain criteria.
We work with salary packaging specialists, Salaris Consulting Pty Ltd (Salaris), to provide salary packaging and administration services for employers. Salaris will help identify, design, implement and manage the administration of your salary packaging program.
Onsite education and one-on-one consultations are offered to each employee to ensure they understand the benefits of salary packaging. During this consultation, Salaris will:
- Undertake a financial and lifestyle needs analysis
- Provide a checklist of the benefits available
- Explain all the expected outcomes of the arrangement
- Provide a full report of the complete package detailing all tax benefits and take-home pay
- Help complete all applications and forms.
To find out how salary packaging can benefit you and your employees call 1800 800 002 or leave your details in our online contact form and we’ll get in touch with you.