Why should I Salary Package with TFM?

If you think salary packaging is just for big earners - think again. Anyone who earns a salary can keep a little more to themselves because of laws that allow employees to replace some of their cash income with items like laptops and car leases.

What is Salary Packaging?

Salary packaging is an arrangement between you and your employer, which allows you to sacrifice some of your salary in return for a benefit of the same value. By paying for this benefit with pre-tax dollars, you reduce your taxable income and therefore increase your disposable income.

When you salary package using pre-tax salary, you reduce your taxable salary, therefore reducing the amount of Pay As You Go (PAYG) tax you pay. To offset this reduction in PAYG tax, the Australian Taxation Office (ATO) levies another tax called Fringe Benefits Tax (FBT).

What can I Package?

There are many ATO approved items you can include in a salary package, although the choice will depend on the FBT status of the organisation you work for, as well as the items your employer has selected for inclusion in their salary packaging program.

Click a link below to view items available under each employer category.

Your employer is a Public or Private not-for-profit Hospital or a Public Benevolent Institution

Your employer is an Independent School

Your employer is a Rebatable Organisation i.e. independent school, scientific institution, trade union or employer association

Your employer is a Corporate or Government entity

Public Hospitals and Charities (PBIs)

Public Benevolent Institutions (PBIs) include public hospitals and other charities.

As an employee of a PBI - Charity (non-hospital), you receive the first $15,900 of most benefits completely free of taxes (no PAYG or FBT).

As an employee of a PBI - Public Hospital, you receive the first $9,010 of most benefits completely free of taxes (no PAYG or FBT).

This means you can salary package either $15,900 or $9,010 from your pre-tax salary each FBT year (April- March), therefore reducing your taxable income by this amount and providing you with substantial benefits.

Within the limits, you can choose to package a range of items including your mortgage, rent, personal loan or school tuition fees. You may also choose our convenient Transaction Card to package everyday living expenses such as groceries, bills, clothes etc.

In addition, there are other items you can package including motor vehicles, laptops, portable printers and mobile phones. You can also package additional superannuation contributions to a fund of your choice.

Our Meal Entertainment Card is also available with a separate FBT exemption threshold of $2,650 and can be used to pay for food and beverages in dine-in cafes and restaurants.

Rebatable Organisations

Salary packaging is an arrangement between you and your employer, which allows you to sacrifice some of your salary in return for a benefit of the same value. By paying for this benefit with pre-tax dollars, you reduce your taxable income and therefore increase your disposable income.

As an employee of a rebatable organisation you are entitled to an FBT rebate (47% rebate applies) on amounts salary packaged up to $15,900 per annum ($30,000 grossed up). FBT exempt items can be packaged in addition to this limit.

Motor vehicles are commonly packaged due to the PAYG tax and GST savings. Work related (FBT exempt) items such as laptops, portable printers, PDAs and mobile phones are also popular. Expense items such as mortgage payments and health insurance may be packaged in some circumstances.

Corporate or Government Entity

Salary packaging involves sacrificing part of your gross salary to receive other non-cash benefits. Those benefits attract varying rates of FBT and some benefits are FBT exempt. There is no PAYG tax payable on the amount sacrificed, hence reducing your taxable income.

Motor vehicles are commonly packaged due to the PAYG tax and GST savings. Work related (FBT exempt) items such as laptops, portable printers, PDAs and mobile phones are also popular.