How much do I save with salary packaging?
With salary packaging, Sue chooses to have some of her money paid to an Everyday Purchases card before she is taxed….Quick links.
| Without Salary Packaging | With Salary Packaging | |
|---|---|---|
| Tax and Medicare | 7,072 | 2,653 |
| Salary after tax | 37,928 | 26,447 |
| Money added to an Everyday Purchases card | 15,900 | |
| Total money available | 37,928 | 42,347 |
How is salary packaging paid?
Your remaining salary (after costs are deducted) is paid to you in cash (credited to your bank account) and is subject to normal Pay-As-You-Go (PAYG) withholding tax. NSW Health staff can salary package because the organisation is categorised as a Public Benevolent Institution by the Australian Taxation Office (ATO).
Does salary packaging give you more money?
Salary packaging lowers your taxable income and increases your take-home pay, giving you more money in your pocket to spend on the things you want. Here’s an example of your salary before and after salary packaging. The benefits available to you, are determined by your employer.
What is CBB salary packaging?
The ATO-approved CBB Meal Entertainment and Holiday Accommodation Card allows you to salary package meals, accommodation expenses and venue hire using tax-free dollars. This provides you with an additional $2,650 tax free per year, saving you even more on tax.
Is salary sacrificing a car worth it?
Salary sacrifice allows you to “sacrifice” some of your salary to pay for items using pre-tax dollars, effectively reducing your taxable income and putting more money in your pocket each pay day. It is a good alternative to buying a car outright or getting a car loan.
How is tax calculated on salary package?
The year during which your income tax is calculated for the previous financial year is called the assessment year….Components for calculating the income tax.
| Income Slab | Tax Rate |
|---|---|
| 2.5 lakhs – 5 lakhs | 10% of exceeding amount |
| 5 lakhs – 10 lakhs | 20% of the exceeding amount |
| Above 10 lakhs | 30% of the exceeding amount |
How much can you salary package per year?
Salary packaging the maximum amount allowed each Fringe Benefits Tax (FBT) year means you’re making the most of this employee benefit. The maximum for employees of not-for-profit organisations is $15,900 (this is also known as your ‘tax free cap’) and $9,010 for hospital and healthcare employees.
Is salary sacrifice worth it for low income earners?
While salary sacrificing can work for some people, it won’t be worth it for others. Salary sacrificing is usually most effective for middle to high-income earners, while there are little to no tax savings for people who are already in a low tax bracket.
Is it a good idea to salary sacrifice?
A salary sacrifice arrangement can be a useful option for increasing your long-term super savings. Possible benefits include tax savings, potential participation in the First Home Super Savings Scheme and more money available for your retirement.