Salary sacrifice tips
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.
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