![]() ![]() We don't provide advice on entering or rejecting a salary sacrifice arrangement. This means you pay less tax on your income.Ī salary sacrifice arrangement reduces your taxable income, meaning you may pay less tax on your income. You and your employer agree for you to receive less income before tax and in return your employer pays for certain benefits of similar value for you. Salary sacrificing is also known as salary packaging or total remuneration packaging. How tax applies to a salary sacrifice arrangement.Entering an effective salary sacrifice arrangement.Medicare levy surchargeĪll taxpayers currently pay a 2.0% Medicare Levy which is deducted with their tax.Find out what salary sacrificing is, how to set up an effective arrangement and the tax implications of an arrangement. For more information, contact SalaryPackagingPLUS. However, you must advise Centrelink that a portion of your pay will be tax free and you will have an exempt reportable fringe benefit. If you receive Family Tax Benefit part A or B, there should be no change in the benefit you receive from Centrelink. Family assistance payments and salary packaging If you pay/receive child support or have HECS/HELP, it is strongly recommended that you consult a financial adviser. Given that salary packaging affects an employee’s taxable income and adjusted fringe benefits amount, the employee’s child support payments will be affected. less any child support payments the employee provided to another person.certain tax-free government pensions or benefits received.deductible personal superannuation contributions.Child support payments and salary packagingĬhild support payments are calculated by reference to adjusted taxable income (ATI) which is your taxable income plus: However, the grossed up value of certain packaged benefits may be included in your RFBA which could therefore increase your HRI. Salary packaging reduces your taxable income and hence your HRI. total net investment loss (which includes net rental losses).reportable employer superannuation contributions.reportable fringe benefits amount (RFBA). ![]() Higher Education Loan Programme (HELP) repayments are calculated based on your HELP Repayment Income (HRI) which is your taxable income plus: You can also stop your package at this time. If there is sufficient evidence, it will be automatically renewed. ![]() Before the start of the new FBT year you will receive a letter outlining your options. The evidence must total $9,009 or more for future package years. There is an option to continue salary packaging after the current FBT year by carrying over an excess amount. Reimbursement excess and package continuation If any of the above occurs, it is your responsibility to notify the SalaryPackagingPLUS team so appropriate changes to your package can be made.Īlso, if you receive a salary increase during the year, either as an award increase, higher duties allowance, routine incremental advancement or from an appointment to a more senior position, the associated additional salary will not be included in your salary package arrangement until the next packaging year.
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