View Full Version : salary packaging?
Has anyone done salary packaging?.
This is where your company that you work for will take out deductions from your wage and automatically pay your bills from your pay each week and you only pay tax on the money you have left remaining.
Nope, not sure if my employer does it?
Yep done it ,all of dhs employers offered it and a few of mine did too the more you earnt the more it was worthwhile doing it.
DH does salary sacrifice for his car. I think it works out well for us. We don't have to budget for any of the car expenses as they're all covered in the package
Yes I have done it in the past - not now though...I SS a car a few years ago and it worked really well for me. Since then the tax rates have changed quite a bit - so I think from memory - if you are earning over $85k its worth it - as far as tax savings go - anything below that you will pay more...Also depends on how many kms etc you do
I would speak to a financial advisor before doing it as your fringe benefits tax might be higher than the PAYE tax savings....
I did it before i had DS1.. i loved it! I didnt have to think about paying bills and i go money for food, fun ect without worrying about bills.
I am now doing something similar called MyBudget that is the same sort of thing but not through a workplace.
Be a bit careful with salary sacrificing general bills, cars and anything other than deductible expenses (eg superannuation, laptops etc).
Generally if your employer does allow salary sacrificing, they will adjust how much they deduct to pay for the fringe benefits tax that they (the employer) has to pay.
(basically if you get non-cash benefits such as your employer paying your household bills, because you are not taxed on those benefits, the employer pays FTB on a 'grossed up value' of those benefits)
With the tax rates being what they are, and the FTB tax rate being MUCH higher than most tax rates, it is often better off for you financially to pay income tax on the money - and just budget better - rather than salary sacrifice and pay FTB.
All in all - if you think salary sacrifice might be a good thing for you, talk to your payroll dept / HR / Accountant ..... before you do anything.
We have been Salary Sacraficing for quite a few years as a way to lower our taxable income but now that Rudd has changed the rules for SS and all the new changes coming in on July 1st it's no longer any benefit for us to salary sacrafice. Make sure that your aware of the new regulations coming in especially if you pay child support or receive any family tax benefit from centrelink before you salary sacrafice as it now affects your payments differently.
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