Salary packagingSalary packaging has the potential to allow employees to reduce their tax payments at no cost to their employer by paying for items with their pre-tax salary.Here’s how it works:You nominate a portion of your salary to be deducted each pay. This tax-free money is used to pay for an approved range of items or payments. Income tax only applies to the amount of your salary that remains after these deductions. By effectively reducing your taxable income, you may decrease the amount of income tax you pay. Less income tax means an increase in your take home salary.
What items can you salary package?Under Australian Tax Office guidelines, the items you can Salary Package depend on the type of organisation you work for. Items commonly salary packaged include:
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