What expenses can
be salary packaged?
For those employers with FBT exemptions or reductions,
the most commonly packaged expenses are Mortgages,
Rent, Personal Loans and Credit Card debts. These expenses
are all non-GST expenses so they maximise the benefit for
the employee, and they are also common expenses that
will quite often cover the eligible amount with one expense,
which reduces the amount of paperwork required by the employee.
For these employers, as well as employers who do not have FBT exemptions or reductions, employees can also package laptop computers or mobile phones that have a work purpose, additional superannuation and novated motor vehicle leases.
FBT exempt & Concessionally treated Employer Groups
Employers can also opt to use the TasMax Living Expenses Card. The employee would apply for our salary packaging card and their packaging funds would be paid direct onto the card each pay for the employee to then spend on any purchases. The card is a VISA debit card, so the employee is only able to spend funds on the card, and it is accepted anywhere that VISA is accepted. By using this card the employee is not required to keep receipts for their purchases, so it is a user friendly low maintenance packaging option.
Some employers also allow their employees to package
Meal Entertainment, which is a dine-in meal at a restaurant
or café for two or more people. There does not need to be a work component to the meal, it is merely a recreational meal such as taking family or friends out for a meal. The TasMax Mealtime VISA debit card is used for this benefit and the nominated amount of funds are paid onto the card each pay.
The employee can then dine out up to the value on the card
at their leisure. The nominated amount of funds for this service
is over and above the Cap and does not attract FBT.
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Full FBT rates apply in the Corporate industry unless a benefit qualifies for a concessional rate of FBT.
The most commonly packaged items in the corporate industries are novated motor vehicle leases, laptops and mobile phones.
Other concessional benefits may be available such as in-house benefits; if your employer trades in a benefit that is made available to employees for salary packaging, then they can package up to $1000 of this benefit without incurring FBT.
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Salary Packaging – Public Hospitals
Public Hospitals have an exemption from FBT up to the grossed up value of $17,000 per employee per year. This means that an employee can package up to $17,000 grossed up per year without paying any income tax or FBT on this amount.
FBT is paid on the “grossed up” salary, this is the same as the figure that is reported on your payment summary, but it is not the actual cash value of the benefits that you can package. The term grossed up is similar to your gross salary compared to your net salary; it is the amount that you would have to earn in order to be able to purchase the benefit from your net salary. This keeps the packaged amount consistent with other items on your payment summary and makes all salaries comparable regardless of the industry and tax concessions available.
The actual cash value that the Public Hospital employees can package is up to $9,095 per year (depending on whether the items are GST or non-GST items). In order to have paid for the $9,095 out of their net salary, an employee would have had to have earned $17,000 gross salary, which is what the packaging is then reported as.
In many cases the employees can also package above this capped amount, and this would be beneficial if they are also packaging an FBT concessional benefit such as a novated motor vehicle lease, or FBT exempt items such as laptops or Superannuation.
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Charities have an exemption from FBT up to the grossed
up value of $30,000 per employee per year. This means that an employee can package up to $30,000 grossed up per year without paying any income tax or FBT on this amount.
FBT is paid on the “grossed up” salary, this is the same as the figure that is reported on your payment summary, but it is not the actual cash value of the benefits that you can package.
The term grossed up is similar to your gross salary compared to your net salary; it is the amount that you would have to earn in order to be able to purchase the benefit from your net salary. This keeps the packaged amount consistent with other items on your payment summary and makes all salaries comparable regardless of the industry and tax concessions available.
The actual cash value that the Charity employees can package is up to $16,050 per year (depending on whether the items are GST or non-GST items). In order to have paid for the $16,050 out of their net salary, an employee would have had to have earned $30,000 gross salary, which is what the packaging is then reported as.
In many cases the employees can also package above this capped amount, and this would be beneficial if they are also packaging an FBT concessional benefit such as a novated motor vehicle lease, or FBT exempt items such as laptops or Superannuation.
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Employers classed as rebatable employers, such as private schools and religious organisations, can apply for a 48% rebate on the FBT up to the capped value of $30,000 grossed up.
FBT is paid on the “grossed up” salary, this is the same as
the figure that is reported on your payment summary, but it is not the actual cash value of the benefits that you can package. The term grossed up is similar to your gross salary compared to your net salary; it is the amount that you would have to earn in order to be able to purchase the benefit from your net salary. This keeps the packaged amount consistent with other items on your payment summary and makes all salaries comparable regardless of the industry and tax concessions available.
The actual cash value that the Rebatable employees can package at the reduced rate of FBT is up to $16,050 per year (depending on whether the items are GST or non-GST items). In order to have paid for the $16,050 out of their net salary, an employee would have had to have earned $30,000 gross salary, which is what the packaging is then reported as.
In many cases the employees can also package above this capped amount, and this would be beneficial if they are also packaging an FBT concessional benefit such as a novated motor vehicle lease, or FBT exempt items such as laptops
or Superannuation.
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