Seeking Advice: New to Salary Packaging, Need Guidance on Company Options, Spending Limits, and Expense Splits

• 

  sumyungguy on 17/11/2023 - 00:58

  +1

  You have to go with the contractors offered by your employer. CBB (among others) offers industry/employer specific advice - packaging is somewhat confusing initially but once you commence it will make more sense.

• 

  Muzeeb on 17/11/2023 - 04:14

  +2

  The most important question here is do you have a HECS debt?

  • 

    AndyC1 on 17/11/2023 - 17:17

    HECS === gogle box?
    or
    HECS === healthy eating corn syrup?
    or
    HECS !== work at a place that has CCB?

  • 

    Tradiebyday on 17/11/2023 - 23:05

    Yes

    • 

      Muzeeb on 17/11/2023 - 23:31

      Then proceed with caution and do your homework.

• 

  geekcohen on 17/11/2023 - 05:37

  -3

  Do I need to spend all the allocated money before the end of the financial year, specifically before March 31st, or are there ways to manage this without rushing expenses?

  Generally no, it is a "pool" of money essentially, so if you don't use/spend it all, it just sits there waiting for when it is needed.

  ---

  Overall, salary packaging is great if you can do it, I did it with my car at my previous employer and it was a nice tax saving for sure.

  • 

    Chandler on 20/11/2023 - 13:12

    Generally no, it is a "pool" of money essentially, so if you don't use/spend it all, it just sits there waiting for when it is needed.

    I think this is wrong.

    You get a certain amount you are allowed to package each (FBT) year without incurring Fringe Benefit Tax. I believe any amount below that cap cannot be forwarded to future FBT years. You are correct in that you don't lose the money: as you have rightfully said, it sits in the account waiting for you to use it; but if what I have said here is true, since it cannot be forwarded to future years then any excess balance cannot be utilised and OP will either need to:

    1. Temporarily reduce their contributions to the packaging account to remove this excess balance
    2. Have the excess balance paid out to them (either directly from the package manager or back via their company payroll), paying income tax on those amounts as applicable

    Note this is #notfinancialadvise and is based on my limited experience with packaging, doesn't consider your personal circumstances, yada yada yada.

    • 

      geekcohen on 20/11/2023 - 13:17

      You are correct in that you don't lose the money: as you have rightfully said, it sits in the account waiting for you to use it

      That is what I meant by "pool" of money.

      • 

        Chandler on 20/11/2023 - 13:27

        Which is why I said that you were correct in that the money just sits in the account waiting for you to use it. But you were missing the nuance regarding accessing that excess balance. No, you don't need to spend it, but you will want to spend it, because if you don't you will need to pay income tax on it to get your hands on it (whether that's through decreased contributions or through re-payment).

        • 

          geekcohen on 21/11/2023 - 08:47

          @Chandler:

          No, you don't need to spend it, but you will want to spend it, because if you don't you will need to pay income tax on it to get your hands on it (whether that's through decreased contributions or through re-payment).

          Yes, that is correct. But that would only be if there are conditions on when it had to be spent by or you if were to leave the job.

          I had this with my car lease. When I moved to a new company, the "balance pool" was paid back to my old employer and then paid through to me after being taxed. I couldn't continue the lease with the new employer, but if I did, they would have to be setup again through the lease provider and then a new "pool" would be started. The existing pool from old employer wouldn't be carried over.

        • 

          Tradiebyday on 25/11/2023 - 10:19

          @Chandler: So I don't have to worry about salary packaging a large amount because I just started and 31 March is around the corner. Even if I choose the maximum package and I don't spend it all, will it just be adjusted and I would pay the tax for the balance not spent? It wouldn't affect me financially?

          • 

            Chandler on 27/11/2023 - 02:03

            @Tradiebyday: I presume it depends on how the package managers want it / have it setup.

            In my experience, any extra balance will just sit in the account for you to use next FBT year. The point of my comments was to make the point that for you to access any excess balance above the cap you will need to pay tax on it, and it will (generally) either be paid directly from the package fund or back through your employers payroll.

• 

  87percent on 17/11/2023 - 08:18

  wife salary sacrifices dining, and depending on how the eftpos machine is set up, will depend if we can use the card there or not

  Eg; you can use the card to pay for Hungry Jacks online, but you cannot use it in the store. It works at some McDonald’s

  Super frustrating

  • 

    xrayed giraffe on 17/11/2023 - 08:23

    +1

    it's for "entertaining", so fast food or takeaway isn't supposed to be allowed. however it was relaxed during covid so people could spend it/get food delivered using the card

• 

  xrayed giraffe on 17/11/2023 - 08:24

  call the company and have them talk you through your questions. they employ people to do this
  they will also have FAQ on their website

  • 

    Tradiebyday on 17/11/2023 - 23:06

    They weren't really helpful

    • 

      cookie2 on 18/11/2023 - 18:20

      +2

      Ask for someone else or write all your qs in an email. Sometimes you get a crappy person that just doesn't want to explain it but just make an appointment with another rep etc.

      • 

        Tradiebyday on 25/11/2023 - 10:17

        3 weeks until the next booking

• 

  cheaplee on 17/11/2023 - 08:26

  Depending what you are to SS, I would be hopeful you can get through your FBT cap before March 31st.

  It's not your allocated money, it's your money, but you only get a certain amount FBT free. Don't sacrifice more than the cap because there is no benefit to you.

  Working with QHealth I can sacrifice mortgage/rent - if you can do that then set up this FBT year the maximum per pay period (50% for me) then claim it back at full rent/mortgage repayments. From next FBT year you will need to reduce the amount you are claiming back each pay period OR you can claim the whole year allocation over the space of a few months then not claim anymore after that.

  If you have HECS debt SS will reduce tax payable per pay period but the FBT exemption you have claimed ($17,999 for me) is used to calculate HECS repayment liability. So work out what your HECS would be on that $17,999 and make sure (7-15%) and pay as voluntary tax along the way, or save it, and pay at end of year or accept you may have tax bill to fill this liability

  • 

    spal on 17/11/2023 - 09:25

    Good advice regarding HECS/HELP. Although voluntary re-payment is not offset against compulsory contribution, but taken to be voluntary HECS repayment. Probably best to set it up as additional voluntary tax payments.

• 

  Tradiebyday on 25/11/2023 - 10:21

  -1

  Is it better to put towards repaying a credit card instead of a debit card for entertainment?
  Does paying of a credit card give you more options on places to spend the money?