Commercial Organisations and Salary Packaging

Employees of commercial organisations generally receive little benefit from most types of fringe benefits, as employers are liable to pay Fringe Benefits Tax (FBT)  at the top marginal rate (currently 48.5%) of the grossed-up value of benefits provided. Hence, there is little incentive for employers to now offer such fringe benefits to employees, as for every dollar’s worth of benefit offered, nearly a dollar’s worth of FBT is payable to the ATO.

However, there are some concessional fringe benefits where the taxable value of these benefits is reduced for FBT purposes. These include private use of a company-owned (or leased) motor vehicle, certain in-house fringe benefits, entertainment expenses, certain relocation expenses, remote area housing and remote area holiday transport. For employees of commercial organisations, tax savings are possible for these types of benefits without increasing employers’ costs.

There are also a variety of Exempt Benefits available to employees of commercial organisations who participate in a Salary Packaging arrangement. These exempt benefits generally include items associated with work, and other items generally deemed to be work-related. They can include:

·        A laptop or notebook computer (one per employee per year)

·        An item of computer software for use in the employee’s employment

·        A brief case

·        A calculator

·        An electronic diary or similar

·        A mobile phone required for work contact

·        Protective clothing related to work

·        Tools of trade

All of these benefits can be flexibly tailored to suit individual employee’s circumstances using the Mistral Salary Packaging program.