Salary packaging is a way of structuring an 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.
For your members to be able to access and utilise the benefits of salary packaging their employer must agree to provide the service. While this may sound like an onerous and costly task, surprisingly it isn't. 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.
Benefits to your members and their employer
Salary packaging can deliver benefit to your members while also benefiting their employer by
- providing an employee benefit with real monetary value, which can increase their staffs take-home pay.
- improving thier ability to attract and retain good staff, while increasing employee satisfaction and wellbeing.
- reducing payroll tax because the wage bill is reduced by the packaged amounts, which can potentially free up funds to spend elsewhere in their business
If you're keen to find out more, the Chifley team will be more than happy to discuss how salary packaging can benefit your members and how we can roll out our services onto your members' work sites.
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.
Salaris provides a comprehensive service that aids both the employer and the employee in implementing a salary packaging solution in a timely and efficient manner.
Together we will assist the employer to identify, design, implement and manage the administration of an appropriate salary packaging program.
Salaris offers onsite education and one-on-one consultations to each employee to ensure that they understand the benefits of salary packaging when tailored to their particular needs. In 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
- Assist in completing all applications and forms.
To find out how salary packaging can benefit your members and how we can assist getting such a service onto their work sites call 1800 800 002 or leave your details in our online contact form and we’ll get in touch with you.