Salary Packaging Changed Forever
3 December 2015 at 11:06 am
Not for Profit employers need to look closely to new legislation in relation to the capping of salary packaged entertainment fringe benefits and get the right salary packaging program to suit their organisations.
Legislation was passed on 25 November 2015 in relation to the capping of salary packaged entertainment fringe benefits. Like all new laws, employers need to look closely at the legislation and see if there is any potential upside.
“At Advantage Salary Packaging we think there is if you have the right salary packaging program,” chartered accountant and in-house taxation expert, Anton Gaudry, said.
The changes will apply from 1 April 2016. Salary packaged meal entertainment and holiday accommodation (venue hire) will only qualify for FBT exemption (or the FBT rebate) up to a grossed up value of $5,000 ($2,550 "cash" value).
This is a dramatic change from the currently uncapped concessions. Remuneration structures will need to be adjusted accordingly.
Salary packaged meal entertainment and venue hire will also be reportable on employee Payment Summaries. This relates to benefits provided from 1 April 2016, which will first be reportable on Payment Summaries for the year ended 30 June 2017. The reporting will have implications for employees with Centrelink payments, HELP debts and child support from 1 July 2016.
Gaudry said the new laws change the game.
“We now have restrictions which have potentially removed some of the salary packaging excesses. However, it also means people will now look for other salary packaging options. Novated car leases in particular will now come into play for more people. Employees and employers may need to adjust their thinking,” he said.
“We also think there are opportunities.”
Visit www.salary.com.au for more information on salary packaging. Contact Anton Gaudry here.
