The recent significant rises in the cost of living have most Australians looking for different ways to manage their household budgets. When you have a fixed income, this can prove challenging. You may not be aware but you should first look for relief from your workplace, but not just by asking for a salary increase. You should consider something else that is available to you – salary packaging. By taking advantage of salary packaging benefits, you can free up more of your income and legitimately gain relief from rising living costs. Here’s how salary packaging works and how it can help you.
What is salary packaging?
Salary packaging is an employee benefit that allows you to pay for some of your living expenses out of your pre-tax income rather than from your after tax income.
What benefits can I claim with salary packaging?
Depending on the industry that you work in, the benefits that you could potentially salary package include everyday expenses such as:
- School fees
- Childcare fees
- Council rates
In addition, you could also package living costs such as:
- Mortgage repayments
- Private home rentals
- Credit card
On top of these costs, depending again on the industry you work in, you may be able to pay for meals and accommodation through salary packaging. Some examples of this benefit are:
- Restaurant Meals
- Hotel accommodation
- Campsite costs
- Packaged holidays
There are many other benefits that you may be able to claim through salary packaging to help you manage rising living costs.
Another salary packaging benefit for you, regardless of the industry you work in, is a Novated Car Lease. If you are in the market for a new (or used) car, you can salary package the costs to finance and run your car with pre-tax deductions rather than paying them all from your after tax income. Some of the car costs included in a Novated Lease are:
- Lease rentals
- Service & maintenance
- Tyre replacement
- Registration renewal
- Comprehensive Insurance
- Car washing
It’s always best to talk to a salary packaging provider who can provide expert advice about the industry that you work in and what benefits you can salary package.
Salary packaging – save money and maximise your income
Salary packaging benefits can be the golden ticket to unlocking the full potential of your income. You may be able to take advantage of tax-free benefits to reduce the amount of tax you pay. Salary Packaging is regulated by the ATO as a legitimate way to use your taxable income to pay for some expenses and the result is you decrease the amount of tax you pay. This makes your income go further than before.
How do I salary package?
In most cases, salary packaging is administered on behalf of your employer by a salary packaging provider, external to your employer. A salary packaging provider will advise you on what you can salary package and tailor a solution for you based on the type of organisation you work for. They’ll work with your employer and you to administer your salary package.
Get started with salary packaging benefits
If this information interests you and you’re looking to save money on your living expenses, The Salary Packaging People have the expertise to guide you.
Contact us today or call 03 5229 4200 and unlock the full potential of your income.