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If your employer offers you the ability to salary package, you should consider how
this may improve your take home pay. If you aren’t offered salary packaging click
here to express
interest in being offered packaging and Paradigm will contact your employer to discuss
the benefits of offering salary packaging to you.
Salary packaging is easy:
- You agree with your employer to trade some of your salary for non cash benefits,
more commonly known as a “salary sacrifice”
- The benefits you elect to package, are determined by your employer, based on what
the ATO will allow and are generally available in your employers’ salary packaging
policyThe amount and duration of the sacrifice depends on your requirements and
Paradigm are available to assist you in establishing what will benefit you
- Each pay period your employer withholds the amount you sacrificed from your salary;
taxes the remaining salary; and pays you a lesser amount
- Each pay period your employer withholds the amount you have sacrificed from your
salary and this reduces the amount of salary being taxed. The amount withheld is
then used by Paradigm to pay for the benefits you have selected.
Let’s look at a few examples. Assuming you currently earn $50,000 as gross annual
salary plus Super Guarantee Contribution.
1. Salary package $100 for superannuation
You agree to sacrifice $100 per week in return for $100 contribution to your superannuation
fund. This $100 is packaged from your pre tax (gross) salary resulting in a lower
income tax deduction as the income tax is based on your new (lower) gross salary.
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Without Packaging
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With Paradigm Packaging
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Gross salary
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$50,000
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$50,000
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Less superannuation package ($100 per week for 52 weeks)
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$0
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$5,200
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New gross salary
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$50,000
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$44,800
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Estimated Income tax
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9,300
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$7,662
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After Tax Superannuation payments
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$4,420*
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$0
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Disposable income
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$36,280
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$37,138
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Extra money in your hands each year: $858
*When funds are contributed via a salary sacrifice arrangement contributions tax
is applied. This after tax contribution has been reduced from $5,200 to $4,420 to
show the savings when the same contribution is applied to your superannuation account
– that is the same contribution after the contribution tax is deducted by your superannuation
fund when the salary sacrifice amount is deposited.
2. Salary package $9,095 for living expenses
You agree to package $9,095 per year for living expenses. Each fortnight $349.80
is packaged from your pre tax (gross) salary resulting in a lower income tax deduction
as the income tax is based on your new (lower) gross salary
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Without Packaging
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With Paradigm Packaging
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Gross salary
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$45,000
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$45,000
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Less living expenses packaging($349.80 per week for 24 weeks)
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$0
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$9,095
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New gross salary
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$45,000
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$35,905
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Estimated Income tax
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7,725
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$5,024
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After living expenses payments
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$9,095
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$0
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Disposable income
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$28,180
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$30,881
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Extra money in your hands each year: $2,701
3. Salary packaging a car
You agree to package a $25,000 car over 4 years, travelling 25,000kms per Fringe
Benefits Tax year (to 31 March of each year). An amount is packaged from your pre
tax (gross) salary resulting in a lower income tax deduction as the income tax is
based on your new (lower) gross salary.
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Without Packaging
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With Paradigm Packaging
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Gross salary
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$60,000
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$60,000
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Less car packaging
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$0
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$11,781
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Net GST returned
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$0
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$1,071
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New gross salary
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$60,000
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$49,290
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Estimated Income tax
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12,450
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$9,076
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After tax car payments
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$14,530
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$2,750
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Disposable income
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$33,020
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$37,464
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Extra money in your hands each year: $4,444
*Salary packaging a novated lease will generate a FBT liability from the day the
car is picked up; however the FBT can be eliminated or reduced by making an after
tax contribution, which is a salary deduction from your after tax income.
What can I package
The choice of items you can include in a salary package varies depending on the
“FBT Status” of your employer. Some benefits are available for all employers and
additional items are available to rebatable and PBI (Public Benevolent Institutions,
also known as not for profit organisations). more...
Use our calculator to see how much you
could save. It is the easy way to better pay!
Paradigm will assist you with items available to you when your package is being
established.
Testimonials....
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