Salary packaging, or salary sacrifice, enables employees to reduce taxable income by using pre-tax earnings for specific expenses. Below are tailored strategies, including options for electric vehicles (EVs) and relocation costs:

Leverage Tax-Free and Exempt Benefits

• Superannuation Contributions: Redirect pre-tax salary to your superannuation account to save for retirement and reduce taxable income.
• Work-Related Expenses: Package costs like professional memberships, work tools, and training that directly support your role.

Electric Vehicles (EVs) and Related Costs

• Novated Leases for EVs:
  • Salary package an EV through a novated lease to save on purchase costs, registration, insurance, and running expenses.
  • Benefit from the EV FBT Exemption for vehicles priced below the luxury car tax threshold (currently $89,332 for EVs).
  • Example: An employee earning $90,000 could save thousands annually by packaging an EV under this exemption.
• Charging Infrastructure: Some employers allow packaging for home EV chargers if they are part of the novated lease arrangement.
• Reduced Operating Costs: EVs incur lower fuel and maintenance costs, further enhancing savings.

Relocation Costs

• Relocation Allowances: If moving for work, salary package expenses such as:
  • Moving household goods and furniture.
  • Temporary accommodation costs.
  • Travel expenses for you and your family.
• Remote Area Benefits:
  • If relocating to a designated remote area, package costs like housing, relocation, or utilities to access fringe benefits tax (FBT) concessions.
  • Example: Rent and mortgage repayments in remote areas may be partially or fully exempt from FBT, reducing tax liabilities.

Access Other Fringe Benefits

• Health and Lifestyle Benefits: Package private health insurance premiums or gym memberships.
• Work-Related Devices: Laptops, tablets, and phones used for work can be packaged tax-free.

Optimise Living Expenses (FBT-Exempt Employers)

• Employees of charities, public hospitals, or not-for-profits can package living costs, including:
  • Rent or mortgage payments.
  • Groceries and utilities.

Education and Training

• Self-Education: Salary package job-related education and training to offset tuition fees and related expenses.

Understand Limits and Caps

• EV and FBT Thresholds: Ensure your chosen EV meets the luxury car tax threshold for tax savings.
• Superannuation Contribution Caps: Stay within concessional contribution limits to avoid additional taxes (currently $27,500 annually for most employees).
• FBT-Free Cap: For FBT-exempt employers, the annual limit for tax-free benefits is $15,900.

Consult with Professionals

• Work with your employer to create a tailored package.
• Seek advice from financial and tax professionals to optimise savings and ensure compliance with laws.
• By strategically salary packaging EVs, relocation costs, and other benefits, employees can enhance their financial position while reducing tax obligations.

Salary packaging offers a range of opportunities to save on taxes and enhance your financial wellbeing. Whether you’re considering packaging an EV, managing relocation costs, or accessing tax-free benefits, these strategies can make a significant impact.

Navigating salary packaging options can be complex, but you don’t have to do it alone. Contact us for tailored advice and support to optimise your salary package and achieve your financial goals!