Effective salary packaging allows employees to reduce their annual tax bill to pay for every day goods and services at zero risk to the employer. Payments for these goods/services are taken out of the employee’s salary before tax is deducted.
The most common products that are usually salary packaged are:
- known as a novated lease is a tax effective solution to purchasing a car and it doesn’t have to be for business use. An employee leases a vehicle from a finance company and the employer takes over the financial obligations under the lease. The employer then deducts the payments from the employee’s pre-tax income.
- can also be purchased with pre-tax dollars and paid off over a period of time through the employee’s payroll.
– is the most popular form of salary packaging. You can potentially add thousands of dollars into your superannuation out of pre-tax income.
Salary packaging can also be attractive to employers because it provides more benefit for employees with little extra cost.
If you would like to know more about salary packaging, please call us on 02 4365 0377.