Salary sacrificing is one of the most effective ways to reduce your taxable income and there are no restrictions on the types of benefits that can be sacrificed... but beware of the traps.
Sacrificing items that attract Fringe Benefits Tax (FBT) can make salary sacrificing less attractive and it can work out you would be better taking your money in the form of after tax income.
Common items that do attract FBT include:
- Motor vehicles
- Expense payments (ie loan repayments, school fees, child care cost and home phone costs)
- Property (including goods, real property such as land and buildings and share or bonds)
Good news is that many items that you sacrifice for your personal benefit are exempt from FBT. These work-related items are commonly provided in salary sacrifice arrangements:
- Superannuation (read more)
- Portable electronic devices
- Computer software
- Items of protective clothing
- Tools of trade
- Reimbursement for parking expenses
We can advise you about a salary package that best optimises your current pay situation.
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