Many employees are unsure what salary packaging across Australia is and how it can benefit them. Salary sacrifice schemes are approved by the Australian Tax Office as an effective way of avoiding excessive tax payments when making a variety of purchases out of your pre-tax salary.
Salary sacrifice for employees
Salary packaging, also known as salary sacrifice, involves employees agreeing to have a portion of their salaries deducted and put towards investments and purchases. The advantage of buying cars and making other purchases through salary sacrifice arrangements is that you will pay less tax overall, which could mean you are saving up to 20%.
Types of salary packages
Employees working in most organisations are able to salary sacrifice, depending on the arrangement employers have with the tax office. Some types of salary packages are commonly available to everyone who makes use of these arrangements, including superannuation, cars and laptops, while others are exclusive for employees of Public Benevolent Institutions (PBIs).
PBI exclusive salary package contents include living expenses, help with loan and mortgage repayments and credit card bill payments. Other popular salary sacrifice purchases include discounts on air travel, childcare, everyday work items and finance products, such as income protection insurance and investment loans.
Contact Fleet Network on 08 6555 3854 for details about salary packaging and novated leasing across Australia like Sydney, Melbourne and Western Australia. Fleet Network administers vehicle leases through arrangements with employers and other remote financiers, making it cheaper for employees to buy or lease a car in Perth.