Salary packaging

Salary Packaging is an arrangement that allows staff to reduce the tax they pay by taking non cash benefits in lieu of salary.

Staff make savings by salary packaging in two ways.  Firstly an income tax saving can be made and secondly the Goods and Service Tax (GST) can be refunded on most benefits.

This information provides a general guide to Salary Packaging at UTS; it is not designed to provide personal taxation advice.  The University strongly recommends that staff interested in salary packaging seek advice from a qualified financial advisor or accountant.  Obtaining financial advice is compulsory for staff wishing to package a vehicle lease.

Staff are responsible for ensuring that after choosing the benefit(s) they wish to salary package they retain sufficient after tax income to meet their personal expenses.

This information is contained in the UTS Salary Packaging Guidelines.

• Eligibility 
• Benefits and how they operate
• Salary packaging fees
• Salary packaging agreements
• Reporting on payslips and payment sumaries
• Adjusting and cancelling your salary package
• Leave withoutpay or other variations to your employment arrangements
• Impact on the payment of HECS_HELP
• Contacts
• Financial Advice

Eligibility

Salary packaging is offered to full-time and part-time staff who are employed on a continuing or fixed-term appointment for greater than twelve months. Some benefits are also offered to casual, part-year and sessional staff.  Information on eligibility can be found on the salary packaging form for each benefit.

Benefits and how they operate

As a general rule any part of salary that is paid as a benefit attracts a Fringe Benefits Tax (FBT) charged at the highest marginal taxation rate.  However, there are some benefits which either do not attract FBT or attract a concessional rate of FBT.  

The benefits UTS offers as part of its Salary Packaging Scheme are:

(a) Tax Free Benefits – Ongoing Periodic Payments
>    Compulsory UniSuper, SSS and SASS superannuation contributions.
>    Additional UniSuper superannuation contributions.
>    Additional private superannuation contributions.
>    Childcare provided by UTS.

These benefit payments are deducted from your pre-tax (gross) salary and paid by UTS on your behalf as fixed fortnightly payments.  

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(b) Tax Free Benefits – Lump Sum Tax Refunds  
>    Calculators, electronic diaries and briefcases.
>    Work related professional subscriptions and membership fees.
>    Financial advice fees relating to salary packaging.
>    Airport lounge membership fees.
>    Kuring-gai gym facilities.

These benefits are paid for directly by you.  On submission of a receipt and the appropriate paperwork UTS will refund the applicable amount of tax to you in your next fortnightly pay.

Traditionally you may have claimed some of these benefits in your annual income tax return.  The advantage of salary packaging is that, in most cases, the GST will also be refunded to you.  It is important to note that you can only claim these benefits once each tax year, either through salary packaging or in your annual tax return.

(c) Concessionally taxed benefits
>    Vehicle leasing

Vehicle leasing is the only benefit offered which attracts a concessional rate of FBT.  The FBT rate applicable is dependant upon the number of kilometres the vehicle is driven.  

The running costs of a leased vehicle are combined with the lease costs into one fortnightly payment which is deducted from your pre-tax (gross) and paid by UTS on your behalf.   

Salary packaging fees
UTS charges a nominal fee to offset the costs associated with offering and administering salary packaging.

The cost to staff is $1.00 per benefit, per fortnight with the exception of motor vehicle leases, which incur a $10 per fortnight fee.  This fee is deducted on a pre-tax basis.  

Salary packaging arrangements
Staff wishing to enter into a salary packaging arrangement with UTS are required to sign a standard Salary Packaging Agreement.  The Agreement outlines the conditions under which your salary package will operate.  The Agreement must be signed by the staff member and an authorised officer within Human Resources Unit or Financial Services Unit before packaging can take effect.  It cannot be made retrospectively.

Reporting on payslips and payment summaries
Your payslip will report your fortnightly salary packaging deductions.  

If you salary package superannuation contributions or a vehicle lease UTS is required to report the value on your annual Payment Summary.  For more information please refer to the relevant benefit information.

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Adjusting and cancelling your salary package
Please advise the Superannuation and Packaging Officer, FSU in writing if you need to adjust or cancel your salary package.

Cancellation of a salary package containing a motor vehicle prior to the expiry of the lease is likely to result in additional charges which you will be responsible for paying.  Please advise Staff Services, HRU as a matter of priority to minimise any potential charges.

Leave without pay or other variations to your employment arrangments
Your salary packaging arrangements may be affected by a reduction in your salary if you go on leave e.g. leave without pay or maternity leave.  If your fortnightly pay cannot accommodate your salary packaging arrangements they will automatically be suspended until your salary returns to an appropriate level.

If you have packaged a vehicle lease you will continue to be responsible for your fortnightly payments.  Please contact Staff Services, HRU to discuss the impact of your leave arrangements on your lease payments.

Impact on the payment of HECS-HELP
If your take home salary is reduced by salary packaging, the amount of your HECS-HELP repayments will also decrease.  This will increase the duration of your repayments.

If you salary package superannuation contributions and/or a vehicle lease a HECS-HELP adjustment may occur in your annual tax return.  If you wish to prevent this please contact your Payroll Officer for further information.

Contacts
Vehicle and general salary packaging:
Staff Services; email staffservices@uts.edu.au or on 9514 1060

Superannuation:    
Superannuation and Packaging Officer on 9514 2853