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Using fringe benefits for your benefit

HLB Mann Judd

A chartered accountant has called salary sacrificing “a must” for employees working for fringe benefit tax-exempt or rebatable employers such as charities, hospitals or not-for-profit organisations.

In conversation with Nest Egg, HLB Mann Judd manager Helena Yuan CA said she would encourage all employees to consider taking up a salary packaging or sacrificing arrangement if they have the opportunity to package FBT-exempt or concessionally taxed items.

She also considered salary sacrificing as an effective option for mid-to-high income earners in the private sector.

Nest Egg has previously reported that there are no statutory limits on how much of an employee’s remuneration can be salary sacrificed

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But the chartered accountant has flagged that there are still limits to the amount able to be sacrificed from a salary, generally driven by FBT exemption limits or the type of benefit being concessionally taxed.

For FBT-exempt or FBT rebatable employers, there is an FBT exemption capping threshold of either $30,000 or $17,000 for each employee, Ms Yuan said.

Where the employer is providing in-house benefits, a $1,000 FBT exemption threshold also applies.

Ms Yuan explained too that when an employee makes additional super contributions under salary sacrifice, he or she “should make sure the total concessional (before-tax) contributions do not exceed annual cap”.

For 2019-20, the cap is at $25,000.

Ms Yuan noted that the concessional contribution is also inclusive of the 9.5 per cent compulsory super guarantee contributions, plus any salary sacrifice contributions and any personal contributions an employee intends to claim a tax deduction.

 

 

Using fringe benefits for your benefit
HLB Mann Judd
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Grace Ormsby

Grace Ormsby

Grace Ormsby is a journalist for Momentum Media's Nest Egg. 

Before moving into the finance realm, Grace worked on Nest Egg's sister site Lawyers Weekly, and was previously a staff reporter at the NSW Business Chamber. 

She holds a Bachelor of Communication (Journalism), a Bachelor of Laws (Hons) and a Diploma of Legal Practice from the University of Newcastle.

Grace can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it. 

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