The taxation legislation provides significant tax concessions for not-for-profit organisations.  One such concession is an exemption from Fringe Benefits Tax (FBT).  This means that Salary Options, on your organisations behalf can pay/reimburse an employee's personal expenses (up to a capped amount per year) without the payment of any tax.  This tax-free amount is in addition to your normal tax free threshold for salary ($6,000 pa.).

When you salary package, money is deducted from your gross salary prior to tax being taken out, hence the deduction is made 'pre-tax'.  You only pay tax on the remaining portion of your cash salary that is paid by your Payroll Department, not the salary package money.   As a result, the tax deducted from your wage is significantly reduced.  The tax saved each pay cycle is a permanent tax saving for you. 

There is a limit on how much you can salary package per fringe benefit year.  The Taxation Office sets the package limit (please refer to your Payroll Department for the limit that applies to your organisation).  The fringe benefit year is 1 April to 31 March.  Our administrator will ensure you salary package within the Tax Office limits.

The following is an example of how you can benefit from salary packaging:

In this example the employee earns $30,000 per year and is currently paying for the following annual expenses: