Salary sacrifice and salary packaging are now frequently part of employee benefits packages, but many people are still confused about what these terms refer to, and how to salary sacrifice in their workplace.
Despite the negative sounding name, salary sacrifice can be a cost effective way to make large scale purchases without losing money to tax. These agreements can be arranged through employers or directly with providers, and involve setting aside a portion of regular salary to pay for purchases such as cars and for pension contributions.
This video from Edenred explores some of the pros and cons of salary sacrifice schemes, which offer savings for organisations and can be mutually beneficial for both employers and employees, especially during tough economic times.
Salary sacrifice arrangements such as novated leases for vehicles can show tangible benefits that are easier to measure in real terms than many other types of employee benefits, and this can improve employee appreciation and satisfaction while also allowing businesses to achieve better credibility.
Some of the potential drawbacks to salary sacrifice schemes include the impact on payroll and administration involved in making these arrangements. Dealing with a salary packaging provider can ease these burdens on a company’s HR department, leaving more time free to concentrate on business strategies.
Fleet Network provides salary sacrifice schemes and novated lease vehicles in Broome and Perth, which can currently be purchased at a flat 20 per cent of taxable deductions. Find out more by calling Fleet Network on 08 6555 3854.