February 19, 2011

Salary packaging for social workers in Australia

SMS MIN BENEFIT > 5K

tax-free salary pkging benefits up to $16,050 p/a

What are fringe benefits?

The most common fringe benefits are expense payment reimbursements. Expense payment

reimbursements include personal expenses paid by an employer on behalf of a staff

member. For example, payment of home mortgage repayments, private health insurance,

children’s school fees and so on. Payment of personal expenses can be made either directly

by the employer to the supplier, or the employer can reimburse the cost of the expense to the

staff member.

Why package personal expenses?

Depending on the expense, substantial savings can be made by staff from having

Centrecare pay personal expenses on their behalf.

By agreeing to take the lower cash salary of $25,000 and have Centrecare make their

mortgage payments as part of their salary package, this staff member will save $3,150 (after

tax) per year. Looked at another way, the gain equates to a 13.1% pay rise and has

increased the market value of the staff member’s remuneration from $35,000 to $39,600

OzChild has very generous salary packaging provisions for staff, permitting staff to salary package

$16,050 per annum. This equates to approximately $6,000 in addition to the gross SACS Award

rate. Staff may also elect to package items such meal entertainment and venue hire; this is in

addition to the salary packaging.

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