When I’m asked the question “Why would I use salary packaging? I often reply with “Why wouldn’t you”. Of course the answer isn’t as simple as that but for many people there is a tax benefit in paying for a range of everyday items through their pre-tax salary rather than after tax salary.
The result? More money left in their pocket.
The ATO allows a range of items that can be packaged and some of them are dependent upon what type of organisation you work for.
Public or private not for profit hospitals and Public Benevolent Institutions (BFI) provide a few more benefits than other employers and the tax advantages will be greater on those items.
The most popular items are superannuation, laptops and cars but the list extends to other things such as professional memberships, child care, mobile phones and taxi fares to name a few.
If you work for a public hospital or not for profit organisation you can package; meal entertainment, living expenses, loan and mortgage repayments, rent, credit card payments, bills and more.
Remember that not all employers will allow packaging so its best to check with them about their policy.
The information in this document reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information.