Every day, thousands of Australians are able to take advantage of salary packaging, a way in which employees can be compensated for their hard work by means other than simply receiving a taxed salary. The real benefit to this sort of payment structure is that employees can receive things that they need pre-tax, meaning that they are able to enjoy a larger take home pay.
What Items Can Be Packaged?
Though there is no real restriction on what employers can include in their packages, the different types of benefits can be separated into three separate categories, starting with fringe benefits:
Different Types Of Fringe Benefits
There are a wide variety of fringe benefits, some of the most popular being:
• Health insurance
• Cars and loans
• Tuition fees
• Childcare expenses
At tax time, you will see the value of any benefits that you receive on your payment summary, though you won’t need to pay any tax or any Medicare levies on the sacrificed income.
TIP: Some benefits, like entertainment, won’t appear on your year end payment summary. These are referred to as “non-reportable fringe benefits”.
Different Types Of Exempt Benefits
These types of benefits won’t be included on an employee’s payment summary and the employer is not obligated to pay any fringe benefits tax. Some of these items include:
• Computer software
• Tools necessary for work
• Protective clothing
• Home office expenses
• Portable electronic devices (i.e. mobile phones, tablets)
• Super Benefits
The final type of benefit we’ll talk about is the superannuation benefit. Employees may be given the opportunity to place some of their pre-tax income into superannuation, which benefits both the employee and the employer.
Industries And Salary Packaging
Depending on the industry you’re in, you may be able to only package certain types of benefits. We’ll start with the most “giving” of the lot, charities and not-for-profit organisations:
Not-For-Profit Organisations (Including Public and Private Charity Hospitals)
Employees who work in these industries will be able to enjoy the widest variety of benefits, and employers are exempt from the limiting $2000 per year fringe benefits tax.
Government
Those who are working on a local, state or federal level of government are eligible for salary package benefits, though what an employee receives will be dependent upon the department or the agency the employee works in.
Corporate/Private Sector
There are a number of salary packaging benefits employees in this businesses sector can receive, from cars and electronics to extra superannuation and beyond.
To learn more about what can be included in salary packaging, please contact Simplygreen Salary Packaging on 1300 664 323.
