What is salary packaging?
Salary Packaging is the term used when an employee elects to have some of their salary paid to them as a non-cash benefit. If salary is paid as cash, then the employee must pay income tax on the salary. In some industries the employer is able to pay the employee’s expenses for them (up to certain capped amounts) instead of paying them cash, which means that there is no need for the income tax to be paid on these amounts.
Who can salary package?
As long as the employer allows it, any employee can salary package, but it depends on the employers FBT status as to whether or not there will be any expenses exempt from FBT. Public Hospitals, Charities, Religious organisations and Private Schools are all types of employers who may be eligible for discounted or thresholds of FBT exempt expenses.
Benefits to the employer?
Employers can elect to outsource the salary packaging process, or manage it in-house. SalaryMasters are able to assist in both areas to find the most beneficial outcome for the employer.