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Before entering into a salary packaging arrangement, AccessPay can assist you in determining which arrangement will work best for your financial circumstances.
Your General Living Expenses and Entertainment Benefits are Reportable Fringe Benefits and will be disclosed to the Australian Taxation Office (ATO) on your annual PAYG payment summary. While you do not pay tax on Reportable Fringe Benefits, it may impact other financial arrangements (benefits and obligations) you have in place, for example, education debt repayments, child support arrangements and Centrelink benefits.
Doing your tax return
Participation in your employer’s salary packaging program enables you to reduce your taxable salary legally, and therefore, pay less income tax. One of the consequences of participation is that an amount known as a ‘Reportable Fringe Benefits’ will be recorded on your PAYG payment summary.
To find out more information, see the Reportable Fringe Benefits Amount Fact Sheets:
Salary packaging can still be beneficial if you have an education debt (such as HELP); however, it is likely to increase your fortnightly education debt repayment by 1% to 2% of your gross income. So while you may repay your debt at a faster rate, you will still make considerable tax savings.
We suggest that, as your required education debt repayment will increase at tax time, you advise your employer’s payroll office to tax you an additional amount each fortnight so that when end-of-financial year calculations are made, a lump sum will be available to make your education debt payment.