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Salary Sacrifice

Example 1:  Misc communication or work related expenses

You earn $55,000 and decide to package $5,500 in benefits through salary sacrifice, comprising a work related mobile phone $900, laptop & printer $2,600 and tools of trade $2,000. You save $2,275 in income tax and GST.  Your employer saves $350 in reduced payments for payroll tax and workers compensation premiums p.a.

Employee earns $55,000
Salary sacrifice for laptop and tools of trade $5,500
Employee tax savings $2,275
Employer payroll tax and workers compensation savings $350

Example 2:  A car

You earn $60,000 as a teacher and salary sacrifice for a $20,000 car under a $4,000 pa novated lease and $4,000 pa in running costs. The car travels 20,000 kms a year. You save $2,400 in income tax and GST p.a. You do not spend the $20,000 required to buy the car – merely the $4,000 pa in lease costs.

Example 3: Living Away From Home Allowance [LAFHA]

You earn $70,000 a year and live in your owned unit. You move interstate for a two year job and rent the unit out for the two years until you intend to return. Whilst away you pay $350 pa week in rent and salary sacrifice this rent and government published food allowances. Your LAFHA salary packaged is $30,000 and the tax saving to you is $9,500 for each of two years.

Example 4:  Relocation costs

You relocate 200 kms for your new job. You sell your home and purchase another within allowed timeframes and rent in between. You salary package your house relocation costs comprising the agent fees on selling and the stamp duty on buying, and the rent in between. Your tax saving from salary packaging this is $17,000.

It is a myth that salary packaging is just for the high income earner. The key issue is – do you have a job ?

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