Return is a CPA business

Salary Packaging for Employers

How does salary packaging benefit employees?

Salary packaging can benefit employees by giving them more cash in their hand than if they don’t salary package non-cash benefits.

The employee may also actually fall into a lower effective tax bracket on the personal income tax scales.

How does salary packaging benefit employers?

Salary packaging is an easy way for an employer to provide hundreds or thousands of dollars in value to employees for little or no cost.

The introduction of salary packaging can provide a cash benefit to employees not unlike a bonus payment yet at no direct cost to the employer.

Salary packaging is one of the few remaining legitimate ways of minimizing tax these days so employers who provide the flexibility of salary packaging are more commonly recognised as ‘employers of choice’. It can be the difference between securing a new recruit or not.

By providing employees with a salary packaged vehicle as opposed to a traditional company car, the employer no longer has to include the vehicle in the businesses accounts. The employee also has the flexibility to package the vehicle of their choice and if they leave the employer, the lease obligations leave with them.

How can Return Salary Packaging assist?

Return Salary Packaging provides a free initial consultation with employers either at their request or on a referral basis from any of their employees.

The purpose of this initial consultation is to discuss the benefits that salary packaging can offer the employer and their employees as well as determining what the employer’s specific needs are.

The employer can then consider how Return Salary Packaging can further advise and support the employer to implement and maintain their salary packaging policy.

Return Salary Packaging can either train the employer’s staff to maintain their own salary packaging policy or if the employer prefers, ongoing maintenance can be provided by Return Salary Packaging.

Where an employer chooses to manage their own salary packaging policy, Return Salary Packaging can provide assistance in completing the employer’s Fringe Benefits Tax (FBT) return.

If Return Salary Packaging manages the policy on behalf of the employer, Return Salary Packaging will automatically provide the necessary information for inclusion in the employer’s FBT return.

Return Salary Packaging provides presentations to groups of employees where their employers have an ongoing relationship with Return Salary Packaging.

The purpose of the presentation is to provide a brief outline of how salary packaging works and how employees may benefit financially from salary packaging. The presentation may also provide details specific to the salary packaging policy that their employer is offering.

How is a salary packaging policy set up?

Return Salary Packaging will work with each employer to tailor a salary packaging policy to their specific requirements.

The policy will include information such as:

• Eligibility of employees i.e. full timers vs casuals
• List of the items that can be salary packaged i.e. motor vehicles, laptops etc
• Any salary packaging limitations or restrictions e.g. the number of laptops which can be packaged per annum
• What costs the employee will have included in their salary package
• Details of how novated vehicle arrangements actually work

For a salary package to be effective for tax purposes, a written agreement must be entered into by both the employer and the employee. The employee agrees to forego future gross cash salary and receive a fringe benefit such as a motor vehicle benefit, laptop computer or additional employer superannuation contributions instead.

Return Salary Packaging will work with each employer to ensure that this is done correctly.

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