Post-Tax Adjustment FAQs
Included in these FAQs
- Why does Smartsalary deduct post-tax amounts for your car?
- What is a Post-Tax Adjustment (PTA)?
- Why do I have a PTA?
- How is my PTA adjusted?
- When will my PTA be available?
1. Why does Smartsalary deduct post-tax amounts for your car?
In order to avoid an FBT liability on your salary packaged vehicle, Smartsalary funds a portion of your lease and running costs using post-tax dollars.
According to ATO guidelines the amount funded by post-tax deductions must not be less than the amount calculated by the following formula:
Vehicle Base Value x Statutory % x Days Available during FBT Year
Days during FBT Year
2. What is a Post-Tax Adjustment (PTA)?
You may be eligible for a Post-Tax Adjustment (or PTA) if the amount of post-tax dollars deducted by Smartsalary and applied to your lease and running costs is more than the above amount.
A PTA is a salary packaging adjustment used to reverse the impact of your extra post-tax payments, and can be processed using one of the methods outlined below.
Note: A PTA does not mean that post-tax funds you contributed towards your vehicle remain unspent at the end of the year. A PTA means that the mix between post-tax and pre-tax amounts collected from you (and spent) during the year included more towards post-tax than needed.
3. Why do I have a PTA?
A PTA usually occurs if you have either:
- Claimed ‘Days Unavailable’ during the FBT year; or
- Achieved a lower Statutory % than was anticipated at the start of the FBT year.
A PTA can also occur if you have been deployed in a declared a tax-free zone during the FBT year; please note this applies to Australian Defence Force employees only.
4. How is my PTA adjusted?
If you are eligible for a PTA, it will be adjusted by one of the below methods. Your employer's policy and account balance will determine which method is used; not all options may be available to you.
- PTA is 'claimed' – the PTA is processed like an ordinary salary packaging claim, i.e.:
- A direct payment is made to you from your salary packaging account balance. This method is only used if Smartsalary determines that you have sufficient available balance to meet ongoing vehicle expenses after the PTA is paid.
- If you do not have sufficient balance, the PTA can be deducted pre-tax over a number of pay periods nominated by you*. The deducted funds are then paid directly to you 1-2 days after your pay day.
- Roll forward – your PTA can be “rolled forward” and applied to the new FBT year: i.e. your post-tax deductions for the remainder of the new FBT year will be reduced.
* Where no nomination is made by you, your PTA will be rolled forward so that you don’t miss out. Regardless of which method is applied, you will receive the same Post-Tax Adjustment.