What is Salary Packaging?
Every employer wants to offer a benefits package that meets the broad needs of its employees - and each employee wants to be able to tailor a salary package to meet their individual needs. Income Essentials provides a personal service to both employer and employee clients. A Salary Packaging program is designed according to the benefits that each employer wishes to offer its employees.
Salary packaging is the legal restructuring of your remuneration with the objective to maximise non-cash benefits plus net take-home pay and to gain better financial benefit from your remuneration. Effectively, this is equivalent to a salary increase where your after-tax income is increased at no additional cost to your employer. The objective is not the minimisation of income tax as is often mistakenly assumed. The Australian Taxation Office approves salary packaging and the salary packaging provided by Income Essentials is fully compliant with FBT (fringe benefits tax) legislation.
Your employer would normally provide your remuneration in the form of cash salary paid after the deduction of compulsory superannuation (where applicable) and PAYG according to current effective statutory rates. You would then meet expenses from after-tax net salary.
With salary packaging you restructure your remuneration by optionally choosing to take a combination of cash salary and one or more benefits from an approved Benefits list (approved by your employer and Income Essentials) that suit your particular needs. The benefits you choose are on-charged to you as salary sacrifice payroll deductions and are primarily paid from pre-tax salary; however, where car benefits are packaged they are paid from a combination of pre-tax and post-tax salary deductions.
Once set up, the Income Essentials program is a fully web-enabled, user pays system that allows online access for employees and on line reporting for employers. Over 95% of employee benefits are paid electronically using an automated EFT system to minimise manual reimbursements, reduce paperwork and optimise cash flow for packaged employees.
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Each employee can discuss their specific requirements with an experienced consultant who is well equipped to advise employees of salary packaging administration details and FBT legislation."