How does it work? Usually, we pay for these things once our payroll department has taken tax out of our salary. Am I eligible? What are capped benefits? How much could you save? Prev All Articles Next. Related articles. I work in Health, how much can I Salary Package? Handy Hints. Novated Leasing. Salary Packaging. Full Name. Popular tags.
Tax savings. Maxxia Marketplace. Car lease. Fully maintained. Workplace benefits. Maxxia Online. Reduced taxable income. Employee benefits. Maxxia Wallet. It involves using your pre-tax salary to buy goods or services that you'd normally buy with your after-tax pay. Because in the eyes of the tax department you're earning less when you're salary sacrificing, they tax you less. Get our newsletter for the best of ABC Everyday each week. If you're looking to buy your first home or want to boost your retirement savings, salary sacrificing into super can be a great option, says Mr Rogers.
What's attractive about this strategy is that superannuation contributions are taxed at 15 per cent, which is much less than the So how does it work? There is one caveat: if you don't end up using the money for your first home, you will have to pay a special tax to access the money, or wait until you have retired. Super is now a bit more flexible than it has been in the past.
You don't even need to tell your employer: you can simply make a personal contribution which is as easy as paying a bill and claim the deduction at tax time. If you're doing that, it's important to notify your super fund that you're claiming the deduction, Mr Rogers says.
If it's more convenient, you could also ask your payroll department to put a little extra to superannuation each time you're paid. There are a couple of important things to keep in mind if you're thinking about salary sacrificing into super:. The most common arrangement is what's called a novated lease. It works like this: you lease a car, and your employer takes the repayments and running costs out of your pre-tax income. If you're planning on buying a new car using finance, novated leasing makes good sense, especially if you're on the top tax bracket, says Mr Rogers.
But many people make the mistake of focusing on the tax deduction rather than the total cost. Another thing to keep in mind is that you have to pay a lump sum to keep the car at the end of a novated lease.
The flip side is that you pay less upfront. It's something that trips a lot of people up, says financial advisor Amir Salehi. Depending on your job and your employer, you might also be able to pay for a laptop, phone or other electronic device out of your pre-tax income. If you're unsure if you're eligible, the first port of call should be your employer, says Mr Salehi.
Workers in public health, not-for-profits or charitable organisations often have great salary packaging benefits. In many cases, employees can even package things like your rent, mortgage payments and credit card expenses using their pre-tax income. The remaining balance is then deposited into your account. Salary packaging flips this around: your employer pays you the same salary but you pay for selected expenses before the tax is taken out, rather than after.
This could reduce your taxable income and give you more money to spend on the things you want. Depending on the industry and sector you work in, when you salary package you could be eligible to pay for a range of expenses with your pre-tax salary. This could reduce the amount of tax you pay and increase your disposable income.
It's up to you. You could use your money to purchase that special item you've been eyeing off, go on that well deserved holiday, or put it away for something you might need in the future.
It's your money, so do more with it. Our customer service and knowledge of the employee benefits landscape is unparalleled. Depending on your employer, the industry you work in and certain individual circumstances, the benefits you may be able to package include car repayments, work-related devices, mortgage and rent payments and everyday expenses including utility bills.
Most people could reduce their taxable income by salary packaging a few everyday expenses. Pay for everyday expenses with a combination of pre- and post-tax funds, which could lower your taxable income and save you money!
We have access to some pretty great car deals. Salary packaging can be complex, but we pride ourselves on making it clear and understandable for you so that you can enjoy the benefits.
Please contact us to discuss the amount you may be able to salary package given your individual circumstances. Similar to the benefits you enjoy, this fee is paid out of pre-tax dollars and doesn't contribute toward your cap towards or attract Fringe Benefit Tax Additional charges may apply for other benefits, such as a novated lease, venue hire, and Meal Entertainment.
The capacity in which we act and the financial services we are authorised to provide are set out in our Financial Services Guides. We act as an agent for those licensees and not for you.
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