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Salary Sacrifice for Exempt or Otherwise Deductible Items

Salary Sacrifice for Exempt or Otherwise Deductible Items

What is salary sacrifice?

Salary sacrifice arrangement is also commonly referred to as salary packaging or total remuneration packaging. It is an arrangement between an employer and a worker, where the worker agrees to forgo part of their future entitlement to salary or wages. This is in return for the employer providing them with benefits of a similar value.

 

Overview of Exempt or Otherwise Deductible Items

Typically, these items would be tax deductible and you would claim the deduction upon completion of your annual tax return. Salary packaging these items brings forward this deduction.

You need to be aware that an item salary package exempt from Fringe Benefits Tax (FBT) cannot be used as a further tax deduction in your annual tax return to the ATO.

When applying for this salary packaging you will be making a declaration to the effect that the item is either principally used for business purposes or is work related.

What can I claim?
The following work-related items commonly provided in salary sacrifice arrangements are exempt benefits:

  • a portable electronic device

  • an item of computer software

  • an item of protective clothing

  • a briefcase

  • professional association fees

  • income protection insurance premiums

  • financial advice fees

  • a tool of trade

Mobile Phone

The work-related cost of one Mobile Phone (including iPhone) per FBT year (1 April to 31 March) can be salary packaged and can be exempt from FBT.

Mobile phone reimbursement: For the mobile phone to be packaged you will be required to supply the original detailed supplier invoice as part of the taxation substantiation requirements.

Laptop/ Notebook/ Portable tablet

The work-related cost of one laptop (including iPad) per FBT year (1 April to 31 March) can be salary packaged and may be exempt from FBT if primarily for business use.

Laptop computer reimbursement:

  • A laptop computer can be purchased from the supplier of your choice.

  • Laptop must be funded with your own money in your name.

  • Reimbursement can be done by instalments or one-off payment.

  • Under this benefit you cannot include additional warranty or carry bags/case.

It is your responsibility to organise your own insurance if you desire as the Laptop is not insured by Whizdom.

Work Related Self-education

Expenses (eg. course or tuition fees, textbooks, technical instruments and equipment) incurred by an employee attending a course at an educational institution or a work-related conference which is directly relevant to the current employment activities that may be allowable as an income tax deduction.

Please note that HECS/HELP payments are not otherwise deductible expenses and courses with a HECS/HELP subsidy are not able to be packaged.

How can I request salary sacrifice – exempt or otherwise deductible items?

  1. Purchase the items according to the guidance above

  2. Fill out Salary Sacrifice Request - Exempt or Otherwise Deductible Items form where you can upload the related tax invoices and submit online

  3. The Whizdom Finance Team will process your request in your next pay cycle.