- What are the financial advantages of salary sacrificing for me?
- Will UNSW be extending the benefits options in the future?
- Can I purchase a desktop computer and obtain the same tax benefit as for laptop computers?
- How does salary sacrificing affect my existing entitlements?
- What increase in take home pay can I expect to achieve?
- Can I change or terminate my package?
- What happens if I am absent on sick leave?
- What about annual leave and long service leave?
- What happens if I go on leave without pay?
- What happens if I leave UNSW?
- What are the traps of salary sacrificing?
- What are the legal aspects?
- Further Information
What are the financial advantages of salary sacrificing for me?
Employer-provided benefits are treated differently from gross salary under the taxation system. Therefore, employees who sacrifice some of their gross salary and have UNSW pay for some of their expenses may be financially better off depending on the benefits packaged and whether or not FBT is payable.
Will UNSW be extending the benefits options in the future?
The benefits currently available or being offered have been selected for two main reasons:
- they do not attract FBT and are, therefore, generally speaking, the most "attractive" for salary sacrificing purposes;
- they are capable of being managed within the current payroll system.
Can I purchase a desktop computer and obtain the same tax benefit as for laptop computers?
No, due to ATO restrictions the FBT exemption for laptop or notebook computers does not apply to desktop computers.
How does salary sacrificing affect my existing entitlements?
All your existing entitlements (ie: superannuation, leave loading, penalties, overtime) will be maintained when you enter into a salary package. In other words all your entitlements will be based on your salary rate as prescribed in the Enterprise Bargaining Agreement applying to your position.
What increase in take home pay can I expect to achieve?
The increase in take home pay you achieve will depend on your personal circumstances and what benefit items you include in your package. Should you package additional voluntary superannuation contributions your take home pay may be less than it was before you salary packaged.
Can I change or terminate my package?
Yes, under certain circumstances, by giving 8 weeks notice.
What happens if I am absent on sick leave?
Deductions will continue to be made and benefits provided whilst you are on paid sick leave.
What about annual leave and long service leave?
Deductions will continue to be made and benefits provided.
What happens if I go on leave without pay?
Deductions obviously cannot be made if you are not receiving salary, and you will need to arrange payments from your own resources for this period. You may suspend additional contributions to Award Plus Plan if you wish.
What happens if I leave UNSW?
If there are any unpaid amounts, these will be deducted from your final salary and/or leave entitlements. Any additional amounts will be payable to the University. If there is a credit owing to you, this will be paid by cheque, posted to your home address. PAYG tax will be deducted from any credit amount due.
What are the traps of salary sacrificing?
Common traps are:
- Over-packaging - committing too much of your earnings to salary sacrificing and therefore not having enough take home pay to meet other expenses you may have;
- Poor advice and misunderstanding the concepts; and
- Superannuation - including superannuation contributions in your package depends on your personal circumstances (eg age to retirement, current Reasonable Benefit Limit (RBL) surcharge implications, and any other legislative changes).
You are strongly urged to seek independent financial advice
Legislative changes - changes to taxation legislation including, but not limited to, changes to Income Tax, FBT, and GST can impact on benefits packaged. Staff need to discuss these risks with their own independent financial adviser as UNSW does not accept any liability for costs imposed by such changes for staff who choose to package their salary.
What are the legal aspects?
Salary sacrificing is legal and is already an established practice in the private and public sectors. Under the Enterprise Agreements between the unions and the University, the benefits described in this guide may be packaged and your taxable salary reduced accordingly, provided the University has made the particular item available to staff to salary sacrifice.
Contact your Faculty HR Consultant.