General Salary Packaging Q&As
1. How do I get the most out of my Salary Package?
There are many items that the ATO allows to be paid as a Fringe Benefit from Pre-Tax Income. The specific Benefits available for you depend on which industry sector you work in and the programme that your Employer has selected.
For further information please contact the Customer Service Team on 1300 654 834.
We also recommend that you seek advice regarding your specific circumstances from a Financial Advisor or Tax Accountant.
2. How will salary packaging effect my pay?
Your payroll department will deduct the nominated portion of your salary before tax is applied. The funds will be transferred to us to make payments to the benefits you have chosen.
This effectively reduces your taxable income with only the remaining portion of your salary subject to PAYG tax and will be reported on your Payment Summary for Individual Tax Returns accordingly.
Please note if you work for a Health or Charitable organisation that is eligible for a Threshold, your Payment Summary will report the gross up value.
3. What will happen to my salary package if I have a pay increase or decrease?
Generally there is no effect to your salary package if you receive a pay increase, you may however wish to add a benefit or increase your budgets to maximise your entitlements.
A decrease in your pay could impact the amount we are able to deduct from your pay and the payments we need to make on your behalf. Please contact the Customer Service Team urgently to determine what action will have to be taken.
4. What happens if I leave my employer?
Your package will be reconciled to balance the deductions from your pay and payments made and ensure that the correct amount of Fringe Benefits Tax has been applied to your package.
Any shortfall or overpayment will then be taken into account by your Employer in your termination pay.
5. What is the cost to salary package?
As your salary packaging provider we manage your account for a small fee as negotiated with your Employer. This is included in your package and is paid out of your pre-tax earnings.
The fee does not attract FBT or contribute to any Threshold Limits.
6. How will my package effect my HECS/HELP Debt?
Salary Packaging increases your Assessable income which will affect how much HECS/HELP you are required to pay for that financial year.You will need to advise us and your payroll if you have a HECS/HELP debt.. Depending on individual circumstances, your package may effect your HECS/HELP repayments whilst still providing you with the benefit of savings through your salary package.
We recommend that you seek further, specific advice regarding your circumstances.
7. Will my salary package affect my Family Tax Benefits and Child Support?
Salary Packaging does not usually affect Centrelink Payments however; your individual circumstances will need to be reviewed.
Child Support payments will be based on an individual’s taxable income after salary packaging plus the reportable Fringe Benefits amount.
We recommend that you seek further, specific advice regarding your circumstances from a Financial Advisor or Tax Accountant
8. Why do I get the GST payable on my benefits (the ITCs) paid back to me
When you salary package certain benefits, the GST payable on these benefits generally gets credited back to you instead of your employer.
You can find a detailed explanation of this additional savings to you, by viewing our brochure Pack Fact - Input Tax Credits (ITCs).
9. I want to submit an application to salary package, am I restricted in the benefits I may select?
Yes, you may be restricted to a range of benefits approved by your employer and to only the benefits appropriate to your industrial sector. Your employer can provide you with their approved list and Our Customer Service specialists are happy to clarify any question you may have by:
- Chatting to you via LIVE CHAT on our website
- You contacting us via telephone on 1300 654 834
- Email at firstname.lastname@example.org
10. What happens once my package starts?
Once your package is up and running you will receive confirmation documents, an email from Remunerator providing all of the details you need to communicate with us and to access your statements.
11. What is the effect on my Payment Summary (Group Certificate)?
Variations as a result of substituting packaged benefits for cash salary, will be reflected on your Payment Summary. It is important to understand that reported amounts will not be subject to income tax but may be taken into account for certain government surcharges and levies.
We encourages you to read more about how salary packaging effects your Payment Summary and surcharges and levies relevant to your personal circumstances:
12. Can I have deductions taken in advance?
If any of your circumstances change it is important to notify Remunerator as soon as possible. We will work with you to provide a suitable outcome which may include taking deductions in advance to cover a period of absence or leave without pay
13. What happens to any unused funds that remain in my package?
A full reconciliation of your salary package is conducted annually after the completion of the FBT year.
Any unused portion of funds will be returned to you via Payroll with PAYG tax applied or in some cases will be carried forward into your new package to utilise.
14. Can I claim for additional items paid for on the same receipt?
There are many specific rules set by the ATO when claiming for reimbursement. Each claim will be assessed by the Reimbursements Team to ensure compliance to these regulations and you will be notified if any part of your claim does not qualify.
Some common Benefit claims that are ineligible include;
Motor Vehicle: Petrol & Maintenance Benefit:
A drink purchased with fuel
After market vehicle accessories (e.g. tyre rims, bulbar & sat nav)
Threshold: Meal Entertainment Benefit
Drinks without any meal
15. I have a receipt for something I purchased prior to packaging, can I claim it?
You can use tax invoices and claim for reimbursement of expenses that are up to 12 months prior to the start date of your package.
To claim a reimbursement you must show proof of expense and payment – i.e. invoice/receipt, credit card statement or bank statement showing payment has been made.
16. Can I separately claim any part of the packaged benefits on my personal income tax return?
No, you cannot receive a tax benefit twice. If you package a benefit through your employer you are immediately prevented from claiming it again privately.
The salary packaging programme brings forward any potential tax savings/claims that you may have had at the end of the financial year (June 30 each year).
17. What is a threshold?
The Public Health and Charitable industry sectors can package specific benefits up to a limit set by the ATO without incurring FBT. Some of these benefits are;
- Mortgage and Rent Payments
- Credit Card Payments
- Living Expenses
The limits are set by the ATO and subject to change. The current rates are;
- Public Health - $9,010 each FBT Year
- Charitable Organisation - $15,900 each FBT Year
In addition, both Public Health and Charitable Organisations may package Entertainment up to a capped limit of $2650.
The Entertainment benefit cap increased from $2550 to $2650 as at 1st April 2017.
18. What if I start throughout the FBT year?
You can still package the full threshold. However, this can depend on what you are packaging, so please contact Remunerator to discuss.
19. I work for a Rebateable Employer (Education/Trade Unions/Associations),how is FBT treated for me?
Employers in this industry sector are eligible to provide a salary packaging programme with benefits up to a specified amount.
The FBT rate is currently 47% (wef from 1st April 2017), of the grossed up taxable value of fringe benefits provided. This industry sector is eligible to claim a 48% FBT rebate, to the extent that the grossed up taxable value per employee does not exceed $30,000.
20. How do I update my bank account details for my claims to be paid into?
Simply loginto the Your Package portal, under the Your Account section, select Bank Account Details.
Complete the online form and upload a copy of your bank statement, clearly showing your name and account number.
21. What Are The Changes to Meal & Entertainment / Venue & Accommodation from 1st April 2016
As of 1st April 2017 the cap increases to $2,650 (i.e. $5,000 grossed up cap divided by type 2 gross up rate of 1.8868).
Effective 1 April 2016, Meal & Entertainment and Venue & Accommodation benefits were capped at $2,550 per FBT year (i.e. $5,000 grossed up cap divided by type 2 gross up rate of 1.9608) and became a reportable benefit with the value spent being reported on your PAYG summary.
Although Meal & Entertainment and Venue & Accommodation are still be treated as separate benefits, from 1 April 2016, the combined cap applies.
That means that expenditure on both benefits will be combined and counted towards the new cap of $2650.