Far from the bustling urban cities, living and working in a remote area offers freedom, natural beauty and tranquility to those that choose to do so.
Remote areas often comes with their unique challenges though, from limited access to amenities to higher costs of travel expenses. However, for those residing in rural and remote regions, the Commonwealth Government have provided some financial assistance with their own specific salary packaging benefit.
Remote area benefits are introduced to help rural residents save on their everyday expenses by allowing them to use pre-tax income to pay for these.
What is the Remote Area Benefit?
The Remote Area Benefit is an incentive offered to employees that live in rural and remote areas that allows remote area employees to salary package their Holiday Transport, Residential Fuel, Mortgage Interest, and Rent.
How Do You Save?
Increased Take-Home Pay
Only 50% of these remote area benefits are counted towards your annual living expenses cap. The remaining 50% is in addition to this, allowing eligible employees to salary package more and increase their amount of take-home pay.
Enjoy More Benefits
Your normal salary packaging cap can be extended further, offering more tax savings.
Income Tax Savings
By paying for these expenses using pre-tax income, you can save on the amount of income tax you pay.
Are You Eligible?
- Residence is located more than 40 kilometers from a town of 14,000 people; or 100 kilometers from a town of 130,000 people.
- You live in the property as your main residence.
- Your employer is also in a remote location .
To check your eligibility, contact our service team.
Holiday Transport
Salary package the cost of travel from your remote location to the nearest capital city.
This is available to eligible employees and their immediate family, such as a spouse or partner, even if you do not accompany them on the holiday.
Plus, if some of your immediate family members do not live with you at your remote location, you can also use this benefit to pay for their travel to meet you.
The Remote Area Holiday Transport requires that:
- The holiday is for three or more working days.
- The holiday is taken by commercial transport, e.g., airplane, train, bus or ship/ferry.
Mortgage Interest
If you have a mortgage on your home in a remote area, you can salary package your mortgage interest payments. Only 50% of the interest paid on your mortgage (not principal) is used in calculating the limit.
50% of your interest is deducted from your pre-tax salary, because 50% of the interest amount is treated as an Exempt Benefit. The full amount of mortgage interest payments is added to your package, 50% of this is tax free, the other 50% attracts FBT.
Rent
Employees renting a residence in a remote area can salary package 50% of rental payments as an FBT exempt benefit.
The Remote Area Rental Payment requires that:
- Your rental is your primary place of residence.
- You rent your home through a real estate agent or private rental.
Residential Fuel
If you are eligible for the Remote Area Mortgage Interest or Rental Payments benefits, you can also salary package household fuel or energy expenses, such as gas, electricity, and firewood.
While this doesn’t apply to motor vehicle fuel, you could consider novated leasing as a clever way to save on your car’s running and maintenance costs.
If you are interested to see what else you can salary package, please see the full list of benefits here