Does anyone here work for a Not-For-Profit and understand the tax benefits that are applicable?
I'm looking at moving jobs to an NFP and understand their are some generous tax benefits for employees.
My understanding of it is that I can claim the maximum $15,900 each year.
If my effective tax rate is 35%, does that mean I can effectively save $5,565?
Are there any other benefits I should be aware of?
For me it’s a sweet ride, I do. the full $15k plus the meal card and save around $6k of tax. Every one is different tho, some people get hit with extras like child support or heck’s etc. I don’t package a car tho, just onto a card and spend from it.
Yes as with all salary packaging, for child support and family tax benefit the govt calculates your grossed-up income. Effectively your $15k sacrifice adds an additional $15k of gross income ($30k of gross up) for assessment purposes.
The logic is that the ATO is working out what gross income you would have had to earn to be at your net income.
"The logic is that the ATO is working out what gross income you would have had to earn to be at your net income."
And they assumed you would be at the highest tax bracket because that's where the additional $15k of gross income (which is almost double of your net sacrifice) come from.
In other words, the ATO assumes you earned much higher for assessment purposes than you actually did.
If you a recipient of lots of entitlements (Eg: Child Care Subsidy, PHI Subsidy, FAO, etc), you could be up for a big surprise if you are close to the cutoff income (ATI) line.
This is not necessarily the case. The Fringe Benefit if you work for a charity is often not gross up for the calculation of family tax benefit etc.
I work for a charity o the ACNC register. Your grossed up income is definitely used to calculate child support and also many other government entitlements. It is not used to calculate your taxable income for income tax purposes.
@lunchbox99: my SO works for a registered charity too.
My SO fringe benefit is not grossed up for the calculation of the family tax benefit. The only one we worry about. The grossed up amount that is recorded on her payment summary is ungrossed for the calculation of family tax benefit.
I don’t think it’s enough for it to be a registered charity they also need to have a special exemption for FBT. Which hers has.
Now child support maybe different.
It definitely depends on which NFP it is and how they are considered by the ATO - e.g. hospitals and the like have different rulings to religious organisations.
Also depends on your job role too - most of our employees get no special treatment as they don't qualify unter the ATO's ruling. Best to ask the payroll people at the NFP if/when you apply as they'll know all the intricate details as part of their job.
Also, be prepared for stuff ups in payroll.
Improperly accounted for overtime and HECS resulted in an unexpected tax bill in our family.
Its just an extra FBT threshold
https://www.intheblack.com/articles/2017/06/15/salary-packag…
you decide