Salary Packaging
WHAT IS SALARY SACRIFICE?
As an employer, when you make an agreement with your staff for them to give up or ‘sacrifice’ a part of their monetary salary before the payment of taxes, and decide instead to add it into their superannuation account as a part of their fringe benefits, that is what is referred to as ‘salary sacrifice’.
Many employers support their staff in salary packaging and allow them to take home a combination of monetary remuneration along with other employee benefits.
Commodities like vehicles, mobile phones, laptops, groceries, home loans, etc are commonly salary packaged. Some of these commodities are charged with the ‘fringe benefits tax’ under the ‘Australian taxation system’.
How does it benefit me?
The benefit of having a salary sacrifice superannuation account for your staff is that their taxes get reduced and they get more value out of their income. As a result, you have more happy employees at your workplace.
The question, however, is that which benefit provides a bigger tax advantage, how the total package of the employee gets affected by this, and how much of an impact does it have on your finances.
To understand this, financial advisors make use of the ‘salary sacrifice calculator’. The calculator works on certain assumptions and reveals factual data. This helps in analysing how much financial benefit one can get by sacrificing what amount of salary.
However, to assimilate the salary sacrifice calculator, the correct guidance of a financial advisor is important. At Stantins, we work with you and for you to guide you on “A Clear Path to Profit”. There are many more benefits of salary sacrifice superannuation. For more details and how it will benefit you and your business, contact a Stantins professional now!
