The income tax rates from 1 July 2014 are:
|0 - $18,200||Nil|
|$18,201 - $37,000||19%|
|$37,001 - $80,000||32.5%|
|$80,001 - $180,000||37%|
|$180,001 and over||47%|
The tax you save from salary packaging depends on your income. For example, if you earn $50,000, you will save tax at 32.5% (your marginal tax rate).
* Add Medicare Levy and NDIS levy (2%)
To calculate your tax saving, go to calculators.
You may also salary sacrifice into your super fund. Some quick facts:
Superannuation can be a complex area. You are advised to seek financial advice.
If you wish to proceed, please contact your payroll.
Your salary packaging money is never taxed. It is NOT included in your 'salary and wage' figure on your Payment Summary. However, the value of your salary packaging is reported to the Tax Office. This figure is included in government income tested benefits or payments. For example, salary packaging will be included as 'income' for Centrelink, HELP, Child Support and Medicare Levy purposes. For a fact sheet, click here.
Salary packaging is shown on your Payment Summary and reported as a 'grossed-up' figure. The Tax Office always requires your 'gross income', whereas the salary package amount ($9,010 or $15,900) is like a 'net' or 'after-tax' amount. The grossed-up figure is calculated using a Tax Office formula:
Value of expenses paid or reimbursed x 1.9608. Therefore, the amount reported is normally:
The amount shown on your Payment Summary is called the 'Reportable Fringe Benefits Amount' (RFB). You must copy this figure exactly as written into your Tax Return. (In 2011/12 this was at IT1).
If you are provided a 'company car', the value of this benefit is also reported. The figure is calculated by your employer and included in your RFB amount.
Please note, not all salary packaging benefits are reported. Non-reportable benefits include:
Superannuation is reported separately on the Payment Summary.
You will need to lodge a tax return if your income exceeds the tax free threshold. From 1 July 2012, the tax free threshold is $18,200.
Your employment income is reported on your Payment Summary. Your income needs to be included in your tax return.
The 'impact' of salary packaging is best explained by way of an example.
For example, you work for Epworth HealthCare and earn $39,095. If you do NOT salary package, your Payment Summary will show:
If you then salary package $9,010 a year, your Payment Summary will look like:
Your taxable income is only $30,000 (previously $39,095). Your salary packaging is reported, but this is never subject to income tax. You will pay tax on only $30,000.
To calculate the benefit to you from salary packaging, use our Calculators. 2015/2016 FBT rates apply
If you need help, please contact us.