The simple answer is – why not? You can enjoy great savings by paying less tax.
Salary packaging (also known as salary sacrificing), is an Australian Tax office approved way of restructuring your income. It enables you to buy a range of everyday items out of your pre-tax salary rather than your after-tax salary – leaving more money in your back pocket.
If you think salary packaging is just for big earners – think again. Anyone who earns a salary can keep a little more to themselves because of laws that allow employees to replace some of their cash income with items like laptops and car leases.
While there are lots of great items that the Australian Tax Office (ATO) allows most employees to package, what you can actually choose from will depend on:
- the type of organisation you work for
- the items your employer has selected
There are two main categories your organisation could fall into: public or private non-for-profit hospitals and Public Benevolent Institutions, or Full Fringe Benefits Tax (FBT).
Public or private non-for-profit hospitals and Public Benevolent Institutions
Public hospitals, private non-for-profit hospitals and Public Benevolent Institutions (which include some community care organisations, charities or medical research institutes) – are provided a few more packaging opportunities.
A full FBT organisation mostly covers all other types of employers, both government and corporate.
At Total Wealth Management, we will eliminate the confusion, explore all your options and help you to make the most out of your pay packet.