Salary packaging is a financial arrangement where an employee can allocate a portion of their pre-tax salary towards certain expenses such as a novated lease, superannuation, and many other benefits. By doing so, the employee's taxable income is reduced, which can result in lower income tax payments and an increase in disposable income.
Read the full list of benefits available to salary package here.
Salary packaging can help reduce the effects of inflation in several ways.
Firstly, it can help employees manage their living expenses more efficiently, enabling them to reduce the impact of inflation on their budget. By allocating a portion of their pre-tax salary towards specific expenses, they may be able to reduce their overall living expenses and maintain their standard of living, even as prices for goods and services increase due to inflation.
One of the main benefits of salary packaging is a car lease, also known as novated leasing.
Novated leasing involves a three-way agreement between you, your employer, and the financier administered by Remunerator. It is a financial arrangement where an employee leases their new, used, electric or hybrid car through their employer as part of their salary package. The employer pays for the lease and running costs of the car, and the employee makes regular payments out of their pre-tax salary to cover these costs.
Novated leasing can help combat inflation by reducing the impact of inflation on the employee's disposable income. The employee's lease payments are made out of their pre-tax salary, helping reduce their taxable income. This means that they pay less income tax, which can help to offset the effects of inflation on their purchasing power.
In addition, because novated leasing involves a fixed monthly payment for the lease and running costs of the car, the employee is less effected by fluctuations in fuel prices and other costs associated with car ownership. This can help to mitigate the impact of inflation on their overall budget.
While salary packaging and novated leasing is not a direct solution to combat inflation, it can provide some financial benefits that may help to reduce the impact of inflation on an employee's budget.
Remunerator's Salary Packaging Program will help you save on your expenses throughout the year using pre-tax salary to pay for your everyday expenses.
Get started with our salary packaging calculator today or learn how much you can save on your new car with a novated lease.