Capped Expenses

Salary package your mortgage, rent, personal loan and save!

Tax-free cap

You can salary package up to $9,010 for living expenses each Fringe Benefits Tax (FBT) year if you work in Healthcare and $15,900 if you work for a Not-For-Profit, Disability, Aged or Community Care Organisation or a Rebatable employer.

Salary packaging eligibility

All full-time and part-time employees are eligible to salary package.

You can package up to 100% of your salary.

Termination Payments

Termination payments cannot be salary packaged.

Things you need to know

  • The maximum we can deduct each pay under this benefit is $9,010/$15,900 divided by the number of pays remaining in the FBT year (unless you want to accelerate your repayments over a shorter period).
  • Benefits that are salary packaged under your employer’s tax-free cap entitlement will give you a reportable fringe benefit amount (see below).
  • You must not salary package costs that have been claimed previously, whether these were claimed under a different employer or through Smartsalary (or both).
  • Each FBT Year (1 April - 31 March), we have a guaranteed claim processing cut-off date of 28 February. If you submit your claim between 1 and 31 March, we cannot guarantee that the claim will be processed and funds paid to you before the end of the current FBT Year.
  • We request funds from your employer well in advance of your pay date, so please take this into consideration when you're submitting your claim.

What can I package under my tax-free cap entitlement?

You can salary package regular expenses such as mortgage or rent, where the payment amount doesn't change, expenses that have variable amounts such as credit card repayments. or a combination of both.

You can even package a combination of these items, as long as you don’t exceed the $9,010/$15,900 cap per FBT year.

Here’s a breakdown of the items you could package.


Mortgage or loan repayments (such as a personal loan)

  • If you provide us with your minimum ongoing monthly repayment obligation, you will not need to submit any further claims during the life of your mortgage/loan.  
  • If you provide us with a loan account statement showing actual loan repayment expenditure, please note that you will need to re-submit once the total of those loan repayments have been reimbursed to you.
  • If we have set up your salary packaging reimbursements based on your minimum monthly repayment obligations and these either increase or decrease at a future time you must inform us so we can adjust your package. If you do not advise us you could incur FBT or other tax charges.
  • You cannot claim this in relation to an "offset account" - payments you claim must be directly to the loan.
  • You must provide substantiation, as outlined below in ‘How to start packaging your tax-free cap’.


  • Once you start packaging your rent, Smartsalary will continue to reimburse you the same rental amount each pay until you contact us to provide alternate instructions.  
  • If we have set up salary packaging reimbursements based on your rental amount and that amount increases/decrease at a future time you must inform us so we can adjust your package.  If you do not advise us you could incur FBT or other tax charges.
  • You must provide substantiation, as outlined below in ‘How to start packaging your tax-free cap’.

Credit card repayments

  • We will set up salary packaging reimbursements for the total credit card payments listed in your claim. If these do not cover your full annual cap entitlement you will need to submit further claims to ensure you maximise your annual benefits.
  • If you submit credit card claims that exceed your remaining annual cap entitlement we will schedule the excess claims towards next year’s cap (please note that we cannot schedule salary packaging claims beyond the end of the next FBT year).

Smartsalary Salary Packaging and Meal Entertainment Card

If you aren’t packaging an ongoing expense like mortgage or rent, the easiest way to salary package your living expenses is by using our ATO-approved Smartsalary Everyday Purchase card. You can save on groceries, bills, clothing, and just about anything else.

For more information about the Smartsalary Everyday Purchases Card, please click here.


General Living Expenses

You can send in a claim form and proof of payment for the following items:

  • Private health insurance
  • HECS/HELP repayments
  • School fees
  • Gym membership*
  • Utility bills*
  • Life insurance*
  • General household items*
  • Travel expenses including airfares*

* Items attract GST.

How to start packaging your tax-free cap

Sign up for salary packaging online via our mobile website and nominate an amount you wish to package – we’ll get your employer to set this aside from your pre-tax salary each pay.

You will need to provide supporting documents when you start:

Mortgage or loan claims
  • a copy of loan documentation (in your or your spouse’s name) showing your minimum monthly repayment obligation; or
  • a loan account statement (in your or your spouse’s name) showing actual loan repayment expenditure you have already incurred.
Rent claims
  • a copy of your rental agreement showing your periodic rent obligations; or
  • a loan account statement (in your or your spouse’s name) showing regular rental expenditure.
Credit card claims
  • a credit card statement (or similar) showing repayment amounts debited against your account; or
  • a bank account statement (or similar) showing payment of amounts to a credit card account.
General living expenses claims or ad hoc expenses
  • copies of tax invoices or receipts providing evidence of the expenditure.


Reportable fringe benefits amounts

Packaging towards the tax-free cap will result in a Reportable Fringe Benefit Amount (RFBA) on your annual PAYG summary.

RFBAs do not affect your income tax liability but the ATO will take them into account when determining certain other obligations and entitlements.  For more information in this regard please visit the ATO website.

It is particularly important to note that if you have a HECS/HELP debt it is likely that your repayment schedule will be affected by the RFBA arising from salary packaging the tax-free cap benefit.  If you do have such a debt please refer to the further information below.

RFBAs and your HECS/HELP Loan

Your HECS/HELP repayments are based upon your ‘HELP Repayment Income’, which includes any Reportable Fringe Benefit Amount.  

How will my RFBA affect my HECS/HELP repayments?

By default, your employer does not take RFBAs into account when calculating your periodic HECS/HELP deductions throughout the income tax year.  This means that if you lodge an annual tax return containing an RFBA you could be faced with an additional lump-sum HECS/HELP payment requirement when you receive your ATO notice of assessment for the relevant year.

To avoid this, you can complete a Withholding declaration – Upwards variation form and provide it to your employer so that additional HECS/HELP deductions can be taken throughout the year. To calculate the amount of HECS/HELP to be withheld, follow these steps:

      1. Calculate your taxable salary by deducting the amount you intend to package towards $9,010/$15,900 tax-free cap items from your gross salary.
      2. Calculate your RFBA by using the formula below: RFBA = Amount of tax-free cap packaged × 1.8868
      3. Calculate your HECS/HELP Repayment Income (HRI) by adding together your taxable salary (from step 1) and your RFBA (from step 2).
      4. Refer to the ATO HECS repayment tables to find your HECS/HELP repayment rate. Record this rate in the relevant section of the Withholding declaration – Upwards variation form and provide it to your employer.