di90

at interview my employer said they salary packaged rent, utility bills etc.
I have read some info on it and it sounds good. Is it all its made out to be? Should i take it up when i sign the contract? I will be working for a public hospital.

Petals

I think if you are youngish and want to boost your super its a good idea. It reduces your tax. However it depends on your lifestyle and if you can afford it. My son salary sacrifices, he is single and young and its the best time for him to do it and it will give him the best benefit .

di90

i'm mid 30's with 1 child. What is super?

joho

Salary packaging is nothing to do with superin the instance you are asking about. Very few companies are allowed to package bills etc. I work at a hospital and it is worth it big time. Basically you can allocate bills upto your area's limit (i do my mortgage) they take this amount divided by 52 weeks, (or by what you opted for) and take this amount out of your wages before you pay tax on it and it. I am not sure exactly how they put it back into your pay but they do. You would be a fool not to do it it can boost your pay by a lot depending on your tax bracket.

Oh and this is seperate from all the other things people associate salary packaging to be.

Jo

joho

Super is the same as pension.

Jo

Petals

Yes lots of people have these deals will be interesting to see if they stay now the gov has changed.

It was basically a scheme to encourage people to put more money into their superannuation to increase their dependency on the gov for pensions later on.

As usual people have their own interpretations of anything good and use it for other means.

quoll

Absolutely, do it. This appears to be the special arrangements pertaining to health care providers which also applies to charities not just the salary sacrificing into super which is available to everyone (and if you are at that stage of your life where you can afford it, it is a very sensible way to go).

Would you rather pay tax on your income then pay your bills or have your bills paid first and then pay tax on what is left? No contest IMHO.

joho

I repeat the OP question has nothing to do with super.

ABCDiamond

Example of Salary packaging:

Assume a salary of $100,000 and your allowable rent and utility bills etc come to $20,000 per year

Example 1 :Normal employee with No Salary packaging will pay tax on $100,000 and then pay the bills.

Example 2: Employee with Salary Pacakaging will pay tax on $80,000.


Example 1:
$100,000.00 Gross
Less:
$27,500.00 Tax & Medicare (NHS)
$20,000.00 Bills

= $52,500.00 Balance Left


Example 1:
$80,000.00 Gross
Less:
$19,200.00 Tax & Medicare (NHS)
$- Bills (already paid)

= $60,800.00 Balance Left (Much better with salary packaging)

Note: Salary packaging is not always available in all occupations


Super
This is your superannuation or pension scheme, not related to the Salary packaging that you are referring to.

The employer pays a minimum of 9% on top of your base salary into a super scheme on your behalf.

You can add extra into this if you wish, to increase the sum available to you when you retire. Extra contributions reduce your tax payable.

Deutschmaster

I looked at salary sacrifice at my organisation. It was crap so didn't take it - too many terms and conditions - they also charged a 'monthly maintenance fee'.

There were a few things which could have been useful - gym membership, mobile phone and car - but you had to use an agent appointed by the organisation to sort it out and they only offered expensive brands. That left the gym membership, but the amount saved was less than the monthly fee. No point really.

From reading the other posts - I'd love to be able to salary sacrifice bills - shame they dont do it here.

ksloan

i salary sacrifice my home loan and my electrric bill. I think with queensland health you have to get financial advise so they can tell you all about it as it is a little confusing. The main point is i save around 150.00 per fornight.

joho

Its worth pointing out to all that this option we are discussing is only available to a very few. Usually health care and government bodies. It is vastly different from cars, laptops, super etc. There are no loop holes the only thing you have to do is declare a fringe benefit in your tax return and pay a small fee each fortnight of approx $4 (depending how many different things you package each one accrues a fee which is why I do my mortgage). I send them a statement which I print off my internet banking, once a year and this takes me upto my $9k (NSW limit, QLD are jammy) and dont hear from them again until the next year.

Jo

Geelong Gent

Firstly you can salary sacrifice anything, within any company or organisation.

The important point is on Fringe Benefit Tax, of which the employer is liable. For certain organisations such as charities they are exempt from this tax. This makes it more preferable for them to use as employment incentive.

However must companies have clause in contract of employment which means they simply recharge the cost of Fringe Benefit tax to the employee.

Super for the OP is a pension fund of which companies have a compulsory requirement to contribute 9%. Some companies pay above this ie 12 - 15%.
Hence common terminology + super or including super.

Salary sacrificing basically works on basis of you pay out of gross earnings ie before tax and therefore reduce your taxable level to the lower tax brackets (45% down to 30% bracket or lower)

Within super are other benefits you should talk to a financial advisor about. - Life insurance, critical illness etc.

ponyrama

I've been offered salary packaging by my new employer (NSW Health) but the way I read it was that I had to have proof of expenditure before i could get the benefits of it i.e. 12 months worth of bills, proof of rent etc which will then determine how much "package" I can have in year 2? Is that right or can I do it as soon as I get there?

joho

No you do need proof so you will have to accumulate it, rent, credit cards etc. So for the 1st year you probably wont be able to do much.

Jo