Why Should I Salary Package?
The aim of salary packaging is the legitimately pay less tax and take home more pay!
Salary packaging allows you to pay for items that you have to pay for anyway, but in pre-tax salary. Depending on what you are salary packaging, fringe benefits tax (FBT), may not apply. The option of having a small fringe benefit provided instead of the equivalent amount of cash salary is an attractive proposition.
There are many benefits to both employers and employees that are gained by salary packaging including:
- Employee's reduce their taxable income as salary packaging and novated leasing is paid for out of an employee's gross salary, their taxable income is reduced.
- Employer's save on payroll tax, as employee's taxable income is reduced, so too is the employer's payroll tax amount. The more employee's who salary package, the greater the savings for the employer!