Salary Packaging
WHAT IS SALARY SACRIFICE?
When you make an agreement with your employer to give up or ‘sacrifice’ a part of your monetary salary before the payment of your taxes, and decide instead to add it into your superannuation account as a part of your fringe benefits, that is what is referred to as ‘salary sacrifice’.
Those individuals wanting to cut down on their taxes and increase their superannuation, thereby increasing the total take-home income, mostly opt for salary packaging, or 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 is that your taxes get reduced and you get more value out of your income. More than that, by the time your retirement comes around, you would’ve contributed tremendously into your superannuation account.
The question, however, is that which benefit provides a bigger tax advantage and how your total package gets affected by this.
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 you can get by sacrificing a certain amount of your salary.
So, to make the most of your salary sacrifice, the 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.
For more details and how it will benefit you and your wealth, contact a Stantins professional now!
