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Salary packaging: what’s it all about

Put simply, salary packaging is allocating a portion of your pre-tax salary to the payment of certain expenses, like your mortgage, rent, groceries or insurance, to reduce the amount of income tax you pay and increase your disposable income.

The amount you can save on tax will depend on your income, the benefits available to you and the types of expenses you choose to salary package. Your AccessPay consultant works with you to understand the salary packaging benefits available to you; how they work and how you can expect your disposable income to be affected.

When you’ve decided benefits, AccessPay works with your employer to set up your benefit so that on payday, it all works seamlessly.

Read more about how to get your salary packaging started here

What can you salary package

There are three main salary packaging benefits available to employees in the not-for-profit sector.

General Living Expenses

Use up to $15,900 per year* of your pre-tax income for expenses you are already paying, including:

  • Rent or mortgage payments
  • Credit card and personal loan payments
  • Household utilities such as gas, electricity and water
  • Car expenses including petrol and registration
  • Health insurance premiums

Meal Entertainment

Meal Entertainment Benefit is capped at $2,650 per FBT year and is in addition to General Living Expenses. Eligible expenses include:

  • Meals and drinks consumed at a restaurant, cafe, tavern or hotel
  • Taxi fares travelling to and from a restaurant, café, tavern or hotel
  • External supplier costs paid by you for catering a private event

Holiday Accommodation

Enjoy your holiday, or a hire a function venue, tax-free! This benefit is combined with the Meal Entertainment Cap, and allows you to salary package:

  • Holiday accommodation, including hotel or motel rooms, apartment or holiday house
  • Car hire while on holidays
  • Hire of a reception venue, private function room or marquee.
Did you know you can salary package a new car with AccessPay and save thousands more every year?
Check out novated leasing here

How much can you save?

General Living Expenses is the most popular salary packaging benefit for not-for-profit employees, so using this benefits, we’ve created the following example to demonstrate how the take home pay on a salary of $55,000 per year can be increased by $5,724*.

The less tax you pay, the more money in your pocket.
Here's how it works
Without
salary packaging
With
salary packaging
More money in your pocket-$5,724
Your salary$55,000$55,000
Salary package to be paid to General Living Expenses-$(15,900)
You pay tax on$55,000$39,100
Tax paid*$(10,347)$(4,623)
Your net salary paid to bank$44,653$34,477
Salary packaged payments to living expenses-$15,900
Your disposable income$44,653$50,377