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1. Who is eligible for Salary Packaging?
Typically, permanent full time, part time, and some contract employees. Check with your employer to see if casual employees are eligible to participate.
2. Do I need to provide any evidence or benefits I receive?
Substantiation of expenses are required for Australian Tax Office compliance purposes. It will generally include the invoice, receipt or similar document. The substantiation requirements vary, depending on the payment method and the benefit being packaged.
3. How long does salary packaging go for and how do I renew my package?
Salary packages operate on an annual basis. Irrespective of when an employee commences packaging, and the "package year" ends on 31 March in order to comply with FBT year reporting requirements. We recommend that towards the end of each package year, an employee review the components of their salary packaging agreement and vary their package items for the next package year if required.
4. How will I know when I am running out of substantiation for my benefit payments?
If you are salary packaging a benefit that requires substantiation to be submitted more than once, Prosperity will advise you by letter, six weeks prior to the exhaustion of your current substantiation. This letter will continue to be sent fortnightly until such time as Prosperity has received and processed subsequent substantiation.
5. What is the benefit of packaging FBT Excempt Benefits?
Employess of organisations that do not receive any FBT excemptions, can salary package excempt benefits such as laptops and electronic devices, superannuation contributions and work related expenses to reduce their taxable income. Individuals who are employed by organisations who receive an FBT exemption for their staff such as Public Hospitals and many charitable organisations may salary package additional taxable benefits to further reduce the amout of tax they pay.
6. Is there a penalty for starting late?
There is no penalty fee for starting the salary packaging program after 1 April in any FBT year.
7. Does salary packaging affect the compulsory superannuation contributed by my employer?
No, it does not.
8. My spouse/partner is on a pension OR I receive government benefits. Will it be affected?
Some income assessed government payments can be impacted through salary packaging. We review all individual cases and make the assessment for you.
9. Will I have a tax bill or lose any of my refund at Tax Time?
Your tax refund or bill will not be impacted by salary packaging unless you choose to salary package an expense that you would otherwise claim as a deductible item, in which case salary packaging simply brings forward the tax benefit.
10. Do bills/statements need to be in my name to be uses as substantiation?
Tax invoices and statements used to substantiate a salary packages expense should be in the name of the claimant on advised family member.
11. What if I have a HECS/HELP debt?
If you have a higher education debt, advise our team and they will renew for you. In most cases, we will advise you to pay a small amount of extra tax per fortnight, allowing you to still take tax savings each pay as well as reducing your higher education debt quicker.
For further information, please contact Prosperity Salary Packaging on 02 4907 7200 or 1300 761 388 during business hours.
Contact details:
Level 2, 175 Scott Street Newcastle NSW 2300
T: 02 4907 7200 or 1300 761 388