What is Public Benevolent Institute (PBI) salary packaging?
Salary packaging is the arrangement to deduct an agreed amount from an employee’s pre-tax wage in exchange for the organisation paying for their nominated benefit or personal expense on their behalf. After your salary packaging amount has been deducted from your fortnightly wage, your tax payments will be calculated on the remaining amount, meaning you will pay less tax.
Public Benevolent Institutions such as not-for-profit organisations can salary package up to $15,900 into general expenses such as mortgage, rent, credit card, personal loan and others.
How will my pay change if I salary package?
The organisation will deduct an agreed amount from your wage before tax each fortnight. This amount will then be sent to their salary packaging provider to make either direct payment to your nominated personal expense/s or to your bank account the day after the salary payment date. The remaining amount becomes your new taxable income.
How does salary packaging affect my tax return?
Money that would have previously been paid as tax will now go towards your salary packaged expenses and the gross income specified in your Payment Summary at the end of the financial year will reflect this lesser value.
Salary packaging provides a benefit in most cases, however, if you make government payments such as Child Support or HECS, you may incur a Fringe Benefits Tax (FBT) liability. We recommend speaking with us to understand how this will affect you.
How will my pay be affected by my HECS/HELP Educational debt?
In most cases, HECS/HELP repayments increase as a result of salary packaging. Your HECS debt will be paid off quicker, however you may not receive as much in your take home pay. We recommend speaking with us so we can calculate your net benefit amount.
Is PBI salary packaging available for full time, part time and casual employees?
Salary packaging is available to many full time, part time and casual employees in organisations, however, in some cases, only those who earn over the current tax free threshold of $18,200 per annum may receive the benefits of salary packaging. The benefit amount vary based on salary. Speak with us to understand more about your specific situation and employer.
What is the meal / entertainment / holiday benefit?
Some employees may be also eligible for an additional amount of $2,650 packaging benefit per year, to spend on meals, drinks, accommodation or car hires. Similar to the general expenses packaging, an agreed amount may be deducted from your pre-tax wages to be used for these expenses. Speak to us to understand the specifics to your situation.
How can I apply and/or change my current salary packaging allocations?
In some cases, can apply for salary packaging over the phone, online or by filling out a paper form. We can step you through this process to assist with your specific situation, employer and goals.
GET IN TOUCH WITH AN EXPERT
For further information or to learn more about Salary Packaging, book an appointment to speak with an expert who can help.