What is Salary Packaging

Salary Packaging takes advantage of the opportunities and tax concessions available to employees of Public Benevolent Institutions, Charities and not-for-profit Hospitals.

One such concession is an exemption from Fringe Benefits Tax (FBT). This means that your employer can provide for some of your personal expenses without payment of any tax. This tax-free amount is in addition to your normal tax free threshold for salary ($6,000 pa.).

When your salary package, money is deducted from your salary before tax is calculated (i.e. the deduction is made ‘pre-tax’). You only pay tax on the remaining portion of your cash salary (i.e. the amount paid by payroll).

As a result, the tax deducted from your pay can be significantly reduced. The tax saved each fortnight is a permanent tax saving. You are never taxed on the salary package money.

There is a limit on how much you can salary package.
•The salary packaging limit is set by the Tax Office per fringe benefit year.
•The fringe benefit year is from the 1st of April to 31st of March.
•Salary Options will ensure your salary package within the Tax Office limits.