Salary package a range of everyday items and you could save
Salary packaging is an ATO approved way to pay for certain items before your salary is taxed. This could reduce the amount of tax you pay and increase your take home pay.
Some organisations offering salary packaging have a rebatable tax status. These organisations are referred to as rebatable, and include private schools, trade unions and associations.
Working for a rebatable organisation means that you may need to pay Fringe Benefits Tax (FBT) on some salary packaging benefits, however the good news is you will be eligible for a 47% rebate1 so you may still benefit from salary packaging.
Car leasing, also known as novated leasing, is one of the easiest and most cost-effective ways to buy and run a car. In fact, you could save thousands over the lifetime of your lease.
If you earn over $120,000, you could enjoy tax savings on everyday living expenses such as mortgage, rent, bills and other everyday items up to the value of $15,900 every Fringe Benefits Tax (FBT) year (1 April - 31 March).
You could save on tax whilst boosting your future wealth.
If you have income protection insurance, you may qualify to package this benefit.
Save up to 45% on eligible portable electronic devices such as laptops and tablets.2
If you use a financial planner or a tax advisor, you could salary package the fees and save.
Studying so that you can get ahead in your job? Salary package the costs and you could save.
There are lots of items you can package to help you save on work-related expenses.
John earns $125k per year, since salary packaging his rent under the $15,900 cap benefit, John gets to take home an extra $810 per year.3,4
Mary earns $90k per year and salary packages a new Hyundai Tucson. She saved thousands on the purchase price, plus continues to save over $2,590 in income tax each year on running costs.3,5
This is general information only. Before entering into any salary packaging or novated leasing arrangement, you should consider your objectives, financial situation and needs, and, seek appropriate legal, financial or other professional advice based upon your own particular circumstances. The availability of benefits is determined by your employer. Conditions and fees apply.
1 The rebate for the 2018 FBT year onwards is 47% of the gross FBT payable, (subject to a cap of $30,000).
2 A portable electronic device can only be salary packaged if it is used primarily (over 50%) for work purposes. Tax savings achieved through salary packaging will depend on your income tax bracket and personal circumstances.
3 Savings example is for illustrative purposes only, are based on the income tax rates for the 2020/21 financial year and are calculated taking into account the FBT payment (after the rebate). Your actual savings will depend on your income tax bracket, the GST processing method nominated by your employer, administration fees payable under your employer’s salary packaging plan and is based on your personal circumstances.
4 Savings example is based on the assumption that the full $15,900 tax free cap has been salary packaged per FBT year (1 April – 31 March).
5 Novated lease example is for illustrative purposes only. Calculations are based on the income tax rates for the 2021/22 financial year and the following assumptions: vehicle purchase price: $37,967 (current as at November 2020), living in NSW 2560, salary: $90,000 gross p.a., travelling 15,000 kms p.a., lease term: 60 months, using Net GST processing method, Employee Contribution Method for FBT purposes and assume you are entitled to the full rebate threshold available via your employer. A fortnightly lease repayment of $383 is payable over the lease term. Savings on the purchase price are a result of the buying power discount available through our novated leasing division, Smartleasing (which is dependent upon the vehicle purchased and the state or territory in which the vehicle is purchased), and the fact that there is no GST to pay on the purchase price (as GST is not payable on a vehicle financed through a novated lease). The running costs savings figure quoted includes budgets for finance, fuel, servicing, tyres, maintenance, Vero by Suncorp comprehensive motor insurance and re-registration over the period of the lease. Your actual savings will depend on your income tax bracket, the GST processing method nominated by your employer, administration fees payable under your employer’s salary packaging plan, the negotiated Smartleasing discount on your chosen vehicle and your personal circumstances. Vehicle residual, as set by the Australian Taxation Office, is payable at the end of the lease term. The exact residual amount will be specified in your vehicle quote.