Salary packaging allows you to create a ‘package’ of income and benefits.

In your salary package, you can include benefits that you would usually pay for with your income after-tax. These include fringe benefits, exempt benefits, and super. What you can include in your salary package depends on your employer and there may be tax that you need to pay.

Fringe benefits

• Salary sacrifice for a car
• Health insurance
• Loans
• School fees
• Childcare fees
• Other personal expenses

Exempt benefits

• Portable electronic devices (laptops, phones, etc.)
• Computer software
• Protective clothing
• Tools of the trade

While your employer will pay fringe benefit tax (FBT) on the fringe benefits, they will not be required to do so for exempt benefits.

Super

You are able to put funds from your pre-tax income into your super fund account. This has benefits for you as well as your employer. This is because your super fund contributions will be taxed at 15% (same as employer’s contributions) which is lower than the marginal tax rate most individuals fall under.