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7/6/2016

SalarypackagingWikipedia,thefreeencyclopedia

Salarypackaging
FromWikipedia,thefreeencyclopedia

Salarypackaging(alsoknownassalarysacrificeorsalaryexchange)istheinclusionofemployeebenefits(also
calledfringebenefits)inanemployeeremunerationpackageinexchangeforgivinguppartofmonetarysalary.
Sucharrangementsareenteredintomostcommonlyiftherearetaxorotherbenefitstobederivedbytheemployer
oremployeefromthearrangement.

SalarysacrificeintheUnitedKingdom
IntheUnitedKingdom,employeebenefitscommonlyincludedinsalarysacrificearrangementsarepension
contributions,childcarevouchers,annualleave,etc.[1]Ifcorrectlystructured,thearrangementcanbenefitboth
partiesasitsavesthembothNIcontributionsaswellassavetheemployeeincometax.
Salarysacrificecanbeextendedtoanyrangeofbenefitsandin2008isbecomingincreasinglypopularinthe
publicsectoraswellasfortransportrelatedbenefitse.g.Cycles,BusTravelandLowCO2emissioncars.Salary
sacrificeisalsocommonlyusedtofundtheintroductionofFlexibleBenefitPlansintheUK.

SalarypackaginginAustralia
Contrarytopopularbelief,provisionsintheFBT(FringeBenefitsTax)actallowfortheemployeesofprivate
companiestoutilise.[2][3]
Itemscommonlysalarypackagedinclude:
vehicles(eitheracompanycarorthroughanovatedlease)
mobilephones
laptopcomputers
Somecompaniesalsoallowtheiremployeestosalarypackageotheritems,includinghouseholdutilitybills,
althoughthisiscomplicatedandnormallyrequirestheassistanceofathirdpartycompanywhospecialiseinsalary
packagingarrangements.SalarypackagedbenefitsinAustraliagenerallyattractFringeBenefitsTaxwithinthe
Australiantaxationsystem,withafewexceptionssomebenefitsareFringeBenefitsTaxexempt,including
mobilephonesandlaptopcomputersifusedforworkpurposes.
Charitiesandpublicnotforprofithospitalscandothismosteffectivelyastheyareexemptfromfringebenefitstax
uptoacertainlimitperemployee(from1April2014theamountsare$9,010forNotforProfitPublicHospitals
and$15,900forPublicBenevolentInstitutions).Additionalbenefitscanbepackagedabovetheselimitsthrough
novatedleasing,mealsandentertainmentorvenuehire(holidayaccommodation)[4]aswellaspersonal
superannuationcontributionssubjecttoConcessionalContributionsCaps.[5]
TheAustralianSalaryPackagingIndustryAssociation[6]istheprofessionalbodyforoutsourcedsalarypackaging
serviceproviders.TheAustralianTaxationOffice[7]administersFringeBenefitsTaxandtheFBTExemptionsthat
facilitatesalarypackagingforemployeesofnotforprofithealthcareorganisationsandpublicbenevolent
institutions.

https://en.wikipedia.org/wiki/Salary_packaging

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7/6/2016

SalarypackagingWikipedia,thefreeencyclopedia

TheFederalGovernmentdeliveredits[8]onthe12thofMay2015.TheBudgetincludedproposedchangestothe
MealEntertainmentandHolidayAccommodation/VenueHirebenefitswithanintroductionofanannualCapped
amount.
Therefore,theproposedchangesapplytoemployeesofPublicHospitalsandnotforprofitFBTexemptemployers.
Proposedchangesaretobeeffectivefrom1April2016,wherethesesalarypackagingExemptbenefitswillbe
cappedat$2,550perFBTyear(i.e.a$5,000grossedupcapdividedbythetype2grossuprateof1.9608).

References
1.HMRCSalarySacrifice(http://www.hmrc.gov.uk/specialist/salary_sacrifice.pdf)
2.salarypackagingbenefits(http://eziway.net.au/salarypackaging/whatcanipackage/)
3.http://www.comlaw.gov.au/Series/C2004A03280
4.SalaryPackaging(http://eziway.net.au/salarypackaging/aboutsalarypackaging)
5.ConcessionalContributionsCaps(http://www.ato.gov.au/individuals/super/indetail/employercontributionsandsalarysa
crifice/salarysacrificingsuper/?page=3#Concessional_contributions_caps)
6.AustralianSalaryPackagingIndustryAssociation(http://www.aspia.com.au/)
7.AustralianTaxationOffice(http://www.ato.gov.au/Nonprofit/)
8.Budgetfor2015/2016(http://budget.gov.au/)

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