Salary sac­ri­fice tips

Townsville Bulletin - - Investor -

means from the em­ployer’s point of view they would be worse off by the amount of the fringe ben­e­fits tax. So they would want to re­duce the amount of the ben­e­fit by the ex­tra tax they would have to pay. This would re­sult in you be­ing no bet­ter off, than hav­ing been paid the amount as wages and taxed ac­cord­ingly. In fact un­less you were in the high­est tax bracket you would be worse off as fringe ben­e­fits are taxed at 46.5 per cent, com­pared to 31.5 per cent tax for those on $ 80,000 or less.

Where salary sac­ri­fice works is in re­gards to cer­tain ex­empt ben­e­fits or mo­tor ve­hi­cle ben­e­fits that at­tract favourable val­u­a­tion t r e a t m e n t . I t i s t h e s e ex­empt or re­duced value ben­e­fits that you would look to salary sac­ri­fice to ob­tain a real tax ben­e­fit.

The fol­low­ing are ex­empt b e n e f i t s : s u p e r c o n t r i - bu­tions, cer­tain util­ity ve- ad­vice on whether those ben­e­fits will ap­ply to your own cir­cum­stances. The ben­e­fit can po­ten­tially be greater the more kilo­me­tres the ve­hi­cle trav­els.

In ad­di­tion to the ex­emp­tions, hos­pi­tals and char­i­ties are ex­empt from fringe ben­e­fit tax up to an amount for each em­ployee. So if you are an em­ployee of a hos­pi­tal or char­ity then re­gard­less of the ben­e­fit pro­vided it would be ad­van­ta­geous to you to sac­ri­fice up to the limit. You may also sac­ri­fice ex­empt ben­e­fits, en­ter­tain­ment meals and leisure fa­cil­i­ties.

This ad­vice is gen­eral in na­ture and read­ers should seek spe­cial­ist ad­vice be­fore mak­ing fi­nan­cial de­ci­sions. WHK Pty Ltd ABN 84 006 466 351.

Li abi l i t y l i mit e d by a scheme ap­proved un­der Pro­fes­sional Stan­dards Leg­is­la­tion other than for the acts or omis­sions of fi­nan­cial ser­vices li­censees.

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