![]() This arrangement must be set up in advance with your employer before you commence the work that you’ll be paid for and it’s advisable that the details of the agreement are outlined in writing. The main benefit of salary sacrificing is that it reduces your pre-tax income, and therefore the amount of tax you must pay.įor example: if you’re on a $100,000 income, you may agree to only receive $75,000 as income in return for a $25,000 car as a benefit.ĭoing this would reduce your taxable income to $75,000 which could lower your tax bill because you’re essentially earning less as far as the tax office is concerned.* You can read more on how to get ready for EOFY here. You’re basically using your pre-tax salary to buy something you would normally purchase with your after-tax pay.Īs we nudge ever closer to the end of the financial year, it’s worth taking a look at salary sacrificing to see if it’s a worthwhile strategy to put into place for you. ![]() In essence, a salary sacrifice arrangement is when you agree to receive less income before tax, in return for your employer providing you with benefits of similar value. Maxxia Pty Ltd does not provide you with any form of financial, taxation or financial product advice on the relative merits of salary packaging or novated leasing or on any other basis.A salary sacrifice arrangement is also commonly referred to as salary packaging or total remuneration packaging. Maxxia strongly recommends that you consult a professional and provide no warranties as to the accuracy of the estimated results produced by the calculator.Īlthough all reasonable care has been taken in designing the calculator, due to the complexity of tax laws, the estimated results can change based on individual circumstances that this calculator is not able to take into account such as (and not limited to) HECS / HELP repayments.The results of the calculator should not be taken to be professional advice nor a substitute for professional advice. Maxxia makes no representation that the results or any related information that the calculator produces is appropriate for your particular circumstances. You should seek your own independent professional advice before making a decision with respect to salary packaging or novated leasing. Rebatable FBT employees may be entitled to salary package FBT Free and other Concessionally Taxed benefits above the $30,000 grossed up taxable value limit.Įquivalent salary calculations are indicative only and do not take into consideration your personal circumstances. Where the payments are subject to GST this amount will be reduced to $14,525 and the gross up rate of 2.0802 should be used to determine the grossed up taxable value of the benefits provided.Įmployees with a Rebatable tax status can salary package expense payments up to $30,000 grossed up taxable value - which is equal to $15,900 actual expenditure on non-GST items. The maximum amount of $15,900 has been determined using a gross up rate of 1.8868 and assumes that the payments are not subject to GST. Public benevolent institutions and charities have a capping threshold (being a grossed up taxable value of $30,000) placed on the amount of fringe benefits they may provide to employees each FBT year without FBT applying. Where the payments are subject to GST this amount will be reduced to $8,231 and the gross up rate of 2.0802 should be used to determine the grossed up taxable value of the benefits provided. The maximum amount of $9,010 has been determined using a gross up rate of 1.8868 and assumes that the payments are not subject to GST. Public and private not-for-profit hospitals have a capping threshold (being a grossed up taxable value of $17,000) placed on the amount of fringe benefits they may provide to employees each FBT year without FBT applying. Please contact Maxxia or refer to your employer's salary packaging policy for more information. You may not be eligible to package all items included in the calculator. The items you could package are determined by your employers salary packaging policy, and the industry sector you work in. HECS/HELP repayments and taxation surcharges are excluded.Īn indicative average salary packaging administration fee of $220.00 has been included. ![]() Tax, benefit & Medicare levy calculations are approximate, and assumes no other taxable income is received. All calculations use PAYG tax rates effective 1 July 2020. ![]() The following is some important information about the assumptions in the calculator:Īll calculations on this website are indicative, and for illustrative purposes only. The calculator is provided for guidance purposes only and the results are estimates to illustrate potential scenarios. ![]()
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