Salary packaging – End of year tips. Act now!
Tuesday, 4th February 2020 at 7:30 am
The next few months are very important if you work in the not-for-profit sector and you salary package.
Salary packaging is capped every year, and that year ends 31 March. The maximum you can salary package with an FBT exempt employer is $15,900 worth of bills ($9,010 for health sector workers) and $2,650 worth of meal entertainment and holiday accommodation. The reality is, if you are not paid this money by 31 March, the tax saving opportunity is lost this year.
Follow these tips to help maximise your salary package
First, the really good news. If you have just started working for a charity or similar organisation, you may be able to get the full annual benefit of salary packaging over the next few months. This will depend on your income and your employer giving you permission. Certainly if your paperwork is up to scratch, the ATO allows maximising of your salary package up until 31 March.
For existing employees, make sure your salary package is up to date. For example, claim your meal entertainment and/or holiday accommodation. If you have not yet utilised your maximum entitlement ($2,650), there is still time left. You need to make a claim now, as you may only have four or five fortnights before the end of the year.
Likewise, the $15,900 (or $9,010) cap needs to be paid before 31 March. Many salary packaging providers wait for your claims before making payment. Or, they may be holding funds waiting for further substantiation (proof of expenses). Whatever the case, you will not receive the maximum benefit unless your salary package is up to date. It is a very busy time of year for salary packaging administrators, so response times may be extended.
The other key reminder is to spend the money on your salary packaging and meal entertainment cards.
The salary packaging caps apply to the cards, just like any other expense. Quite simply, if you don’t spend all the funds on the cards by 31 March, the tax saving is lost on the balance. If you snooze, you lose!
Follow the above simple tips and you’ll get the maximum tax saving (and enjoyment) from salary packaging.
Also, if you are considering changing salary packaging providers, now is the time to start discussions. Most employers prefer a changeover date of 1 April, being the start of the new salary packaging (FBT) year.
The team at GO Salary have over 50 years of experience and are more than happy to discuss their professional, innovative services.
Visit www.gosalary.com.au for more information.