Salary Packaging Policy

Transcription

1 Salary Packaging Policy TABLE OF CONTENTS 1 Purpose 1 2 Scope 1 3 Definitions 1 4 Policy Overview 2 5 Legislation 3 6 Financial Advice 3 7 Administration and Package Costs 3 8 Fringe Benefits Tax 4 9 Reviewing Salary for Accuracy 4 10 Specific Policies: 10.1 Superannuation 10.2 Novated leases 10.3 Car parking 10.4 Mobile devices 10.5 Other benefits Appendix A List of car parking stations 1. Purpose: To provide News Corp Australia employees with market competitive flexible remuneration options that aid employee attraction and engagement. 2. Scope: Salary packaging is available to all permanent full-time and part-time employees of a News Corp Australia company who have successfully completed their probationary period. With the exception of superannuation, casual employees are not eligible for this benefit. New employees with a pre-existing novated lease arrangement with a previous employer, may be approved to participate in salary packaging prior to their commencement. This will be decided on a case by case basis by the employee s leader and People and Culture. 3. Definitions: Car Parking Benefit a fringe benefit that arises as a result of paying for car parking from pre-tax salary Employee Contribution Method (ECM) is a method of paying or reducing your FBT liability by making post tax contributions towards the operating costs of a novated lease vehicle. FBT or Fringe Benefits Tax is a tax that is levied on non-cash benefits that employers or associates of employers provide to employees or associates of employees in respect of the employment of the employee as determined in accordance with the Fringe Benefits Tax Assessment Act Specific rules apply to car fringe benefits. FBT Year FBT is calculated annually over the period from 1 April to 31 March. Lease Termination relates to the termination of a Novated Lease and occurs on the earlier of the end of the lease period or you leaving News Corp Australia People and Culture Page 1 of 8

2 Mobile Devices refers to a number of business related tools such as ipads, laptops and mobile phones that may be packaged where they are primarily for business purposes News Corp Australia company or News Corp Australia means any or all of the following companies: Advertiser Newspapers Pty Limited ABN Courier Newspaper Management Holdings Pty Limited ABN Davies Brothers Pty Limited ABN Gold Coast Publications Pty Limited ABN Leader Associated Newspapers Pty Limited ABN Messenger Press Pty Limited ABN Nationwide News Ltd ABN Nationwide Newspapers Pty Limited ABN News Digital Media Pty Limited ABN News Limited ABN News Life Media Pty Ltd (fmly News Magazines Pty Limited) ABN Perth Print Pty Limited ABN Queensland Newspapers Pty Limited ABN The Cairns Post Pty Limited ABN The Geelong Advertiser Pty Limited ABN The Herald and Weekly Times Pty Limited ABN The North Queensland Newspaper Company Pty Limited ABN Novated Lease A novated lease is a three way agreement between you, News Corp Australia and the finance provider where you can use your pre-tax and/or post-tax income to obtain a vehicle of your choice. Otherwise Deductible Benefits - non-cash benefits that may be packaged by you that are otherwise deductible to you in your income tax return, such as, but not limited to, professional subscriptions and income protection insurance Package Costs the costs associated with any of the salary package costs contained in this policy such as, but not limited to, the lease and running costs of a vehicle, car parking fees, FBT and administration fees. Residual Value the future value of a vehicle based on the Australian Tax Offices allowable percentages of depreciation Salary Packaging also referred to as salary sacrifice, is an arrangement between you and News Corp Australia where you agree to forgo part of your salary on a pre-tax basis in return for benefits of a similar value provided by News Corp Australia (or an associate of News Corp Australia) Salary Packaging Provider News Corp Australia has engaged an external provider, Remunerator, to manage some of the salary packaging arrangements on a user-pays basis. Statutory Formula Method is a method used to calculate FBT on a Novated Lease. It is based on the purchase price of the vehicle and the kilometres travelled during the FBT year. 4. Policy Overview: News Corp Australia provides a range of market competitive salary package benefits to eligible employees. Individual circumstances are different or can change and FBT legislation can be complex. Consequently, employees are encouraged to obtain independent tax and/or financial advice prior to entering into a salary packaging arrangement. It is your responsibility to ensure you understand your rights and obligations under any salary package arrangement and that you have allocated sufficient funds to meet the total cost of the salary package benefits as well as have sufficient funds to support your daily lifestyle. News Corp Australia will not under any circumstances reimburse package shortfalls or provide any form of financial support other than that which arises under your contract of employment. Non cash benefits that attract the full FBT rate are not able to be packaged. People and Culture Page 2 of 8

3 There are two types of salary packaging benefits. Those provided by News Corp Australia directly and arranged between you and payroll, specifically, superannuation and a range of benefits provided through our salary packaging provider: a. Novated Leases (motor vehicles); b. Mobile Devices (laptops, mobile phones and ipads); c. Car Parking (currently available for Surry Hills employees only); and d. Other Benefits that are either exempt or attract no FBT or reduced FBT such as professional subscriptions and memberships or airport lounge memberships Further information on these benefits, including policies specific to each benefit and how to apply can be found: a. Under the relevant section relating to each benefit in this policy document; b. By contacting the salary packaging provider on c. Through the salary packaging provider s website at: Web: Username: newscorp Password: australia Please note the login details are case sensitive. 5. Legislation: This benefit is offered in terms consistent with existing legislation. If legislation changes either limiting or eliminating access to any benefit, News Corp Australia will comply with the legislation. You will be asked to sign an Agreement acknowledging this requirement. It is your responsibility to satisfy all legislative criteria and substantiation requirements. Compliance requirements will be advised by the Salary Packaging Provider once the benefit has been selected for packaging. News Corp Australia reserves the right to vary or withdraw this policy, should changes to any relevant legislation cause News Corp Australia to be in breach of that legislation. 6. Financial Advice: The nature of salary packaging is such that the value of benefits for each employee will be different as will be the impact of the tax treatment that is applied to the benefits. For this reason, it is strongly recommended that all employees seek independent qualified financial and/or tax advice prior to entering into a salary sacrifice arrangement. News Corp Australia is not authorised to provide financial advice. News Corp Australia and its employees involved in the preparation of the salary packaging administration expressly disclaim all liability for any loss or damage of any kind, which may arise from any person acting or relying on any statements contained in this policy or on the News Corp Australia intranet or Salary Packaging Provider website. You will be asked to sign a declaration form stating that if you did not receive financial advice you understand the potential financial implications. 7. Administration and Package Costs: The cost of administering salary packaging arrangements via the Salary Packaging Provider is your cost, including any additional costs incurred by lease variations. News Corp Australia will not under any circumstances cover or reimburse package shortfalls. When a vehicle is packaged over a certain value, it is deemed to be a luxury vehicle. This amount may change annually as it is set by the ATO. Salary packaging a luxury vehicle results in a change to the way in which tax deductions are made for an employer. This can result in an increase in costs to the employer. If this situation occurs, you will be responsible for the increased cost to News Corp Australia and the salary package amount will be adjusted to include these costs. Any applicable administration fees charged by the Salary Packaging Provider and FBT on a salary package benefit is a cost to you and can also be packaged on a pre-tax basis or in the case of motor vehicles a post-tax contribution to FBT can be made. People and Culture Page 3 of 8

4 8. Fringe Benefits Tax: Any FBT liability that arises as a result of the provision of benefits is fully costed to your package. 9. Reviewing Salary for Accuracy: The salary packaging provider and News Corp Australia make every effort to ensure that the deductions made from your salary are correct, however, errors can occur and as such you should check your salary against the authorised agreement. News Corp Australia is not responsible for any errors made by the salary packaging provider. 10. Specific Policies: 10.1 Superannuation You may make voluntary pre or post tax superannuation contributions by completing the Superannuation Update Request Form which can be located on the intranet at Before completing the form you should be aware that there are limits to the amount of pre tax contributions that can be concessionally taxed in superannuation funds. Pre tax contributions also include any superannuation (including superannuation guarantee) payments that the company is required to make on your behalf. There is also a limit on the amount of post tax contributions that you can make. Superannuation legislation is constantly changing. If in doubt you are encouraged to consult your superannuation fund and/or seek independent financial advice Novated Leases: A Novated Lease is a three way agreement between you, News Corp Australia and the lease company. You lease a vehicle from a lease company determined by the Salary Packaging Provider. Deductions for payments are made from your pre tax income unless you have also elected to make a post tax contribution. News Corp Australia then makes package payments on your behalf to the Salary Packaging Provider who then pays the various suppliers. Standard Novated Lease terms are between 12 and 60 months. At the end of the Novated Lease term, options are available to extend the lease for periods of 12 months to 24 months. A Novated Lease is terminated at the earlier of the end of the lease period or you leaving News Corp Australia. It is important you understand that when a lease is terminated, the rights and obligations under the agreement are transferred back to you. There are a number of options available to you including handing the vehicle back to the finance company or transferring the vehicle to personal ownership. It is your responsibility to ensure that you have allocated sufficient funds to meet the total cost of the benefit and you have sufficient funds to support your daily lifestyle. Novated Lease Protection Insurance In the event of involuntary termination of employment, protection insurance is available. The standard Novated Lease Protection Insurance covers up to three months of lease payments and subject to certain other conditions in the policy, you can hand the car back at the end of the period covered. Should you elect to be covered, the cost of this insurance will be included in the salary package arrangement. Fuel and Maintenance A motorcharge card for petrol and maintenance is available upon request from the salary packaging provider. You can use the motorcharge card to pay for fuel, servicing or maintenance at participating outlets. Alternatively, you can pay directly and be reimbursed from the salary packaging provider by submitting receipts for expenses. These reimbursements will come from funds accumulated in the package for these expenses. Parking for a Novated Lease Car Salary Packaging a vehicle does not entitle you to an allocated car parking space. Vehicle Selection You may select a vehicle of your choice provided it: Is a passenger carrying vehicle which seats less than nine people; People and Culture Page 4 of 8

5 Has an Australian compliance plate; and Will be less than eight years old at the end of the Novated Lease You must be able to meet the financial commitments of the lease and associated running costs of the vehicle. Greener Options aligned to News Corp Australia s environmental policies: For every vehicle that uses a Remunerator Motorpass fuel card, Remunerator will offset carbon emissions managed through Greenfleet. Greenfleet is a not-for-profit organisation that offsets carbon emissions through planting biodiverse native forests. To encourage employees to consider the environment as part of acquiring a vehicle, any vehicle that is 5 star rated in accordance with the Green Vehicle Guide ( information can be found at ) will receive free membership of Remunerator s Buyers Advantage programme that can be used to access discounted goods and services from a range of sources. Insurance and Registration All Novated vehicles must be covered by full comprehensive insurance. The salary packaging provider can arrange for comprehensive insurance or you can select and arrange your own. Either way, the insurance can be selected as a pay by the month or annual premium. The salary packaging provider will either pay directly to the insurer or reimburse you for insurance expenses. There are no up front registration costs for new vehicles however the salary packaging provider will accumulate enough over the year to cover registration when it next falls due. Reimbursements If payment cannot be made with the motorcharge card, for an expense incurred on your leased vehicle, you can claim reimbursement through the salary packaging provider or electronically via the Remunerator app. This will then ensure the expense is paid from pre-tax salary. Reimbursement forms are available from the salary packaging provider. Leave When arranging for extended unpaid leave such as parental leave or a career break, it is important that you consult with the Salary Packaging Provider to make alternative arrangements for the payment of the lease prior to commencement of the leave. This can be facilitated by direct debit to the lease provider from your nominated bank account. On return to work you must notify the payroll department as well as the Salary Packaging Provider so salary sacrifice arrangements can be reinstated. It is your responsibility to make alternative payment arrangements with the Salary Packaging Provider during any periods of extended unpaid absences. Residual Value The Residual values are set by the ATO and vary depending on the Lease Terms. You are directly responsible for the residual value at the end of the lease. There are a number of options available in order to deal with the residual value including, paying the residual value outright or refinancing the residual value over another term. Cessation of Employment and End of Lease Prior to leaving, you must contact the Salary Packaging Provider to ensure that a Novated Lease reconciliation is performed quickly and accurately. The Salary Packaging Provider will reconcile the Novated Lease account and notify the payroll department. At the end of your employment, your actual expenditure will be compared against your budgeted expenditure as soon as all costs are able to be ascertained. Where your budget has been overspent, you will be required to immediately pay back the full difference to the News Corp Australia. Where you have spent less than the budgeted amount, the difference will be reimbursed to you by via payroll and will have the appropriate amount of tax deducted. News Corp Australia reserves the right to review all payroll and the Salary Packaging Provider s records. In the event that anomalies are found News Corp Australia reserves the right to recover retrospective amounts owing to the company over a reasonable time period in consultation with those affected. At the end of the lease period or upon cessation of employment, the rights and obligations revert back to you meaning you are directly responsible for your lease commitments. People and Culture Page 5 of 8

6 Upon cessation of employment your options include; Make post tax payments for the lease and running costs; Re-novate the motor vehicle with a new employer; Payout the lease; or Sell the motor vehicle and payout the lease How to Obtain a Novated Lease 1. It is recommended that you obtain independent tax and/or financial advice. 2. Contact the Salary Packaging Provider (Remunerator) on or novated@remunerator.com.au to obtain a quote. You will need the following information: a. Vehicle type or prices; b. Lease term; c. Anticipated annual kilometres; d. Gross annual salary (excluding superannuation); and e. Pay frequency eg monthly, fortnightly etc 3. You will be provided with a quote and application kit within two business days. The quote will include all financing, estimated FBT and running costs for the car. 4. An eligibility form will be included in your application kit. Ensure the eligibility form is signed off by your People and Culture Business Partner or the Head of Remuneration and Benefits. 5. Advise the Salary Packaging Provider if you wish to accept the quote by returning a completed application form and other required information as noted in the application kit. 6. The leasing provider conducts a credit reference check. If the credit check is rejected, you will be contacted and advised. 7. Once the finance application has been approved, the Salary Packaging Provider will either order the vehicle (if sourced through the Salary Packaging Provider) or facilitate through your dealer of choice. 8. When the vehicle is ready for delivery, the Salary Packaging Provider will draw up the Novation Agreement and the leasing documents for you to sign. 9. You sign the Novation Agreement and leasing documents where indicated and return the documents to the Salary Packaging Provider. 10. Upon receipt of the signed documents, the Salary Packaging Provider will arrange settlement of the vehicle with the dealer and notify you when the vehicle is ready to be collected. 11. The Salary Packaging Provider sets up the package details and advises the payroll department to begin deductions. 12. You must ensure that deductions occur from your pay in order to meet package costs. Please note: The application form, approval and confirmation must be completed 15 calendar days prior to the employee s next pay Car Parking: A car parking benefit is currently only available to employees working in Surry Hills. You may elect to salary package the cost of parking at a number of parking stations located in Surry Hills and the Sydney CBD, subject to availability. As the FBT will vary for each of these parking stations, a notional amount of FBT will be added to your package amount. When the FBT returns are calculated, a reconciliation will be done and any variation, up or down, will be an adjustment to your salary. For the FBT year ending 31 March 2014, the notional amount will be $2,631per annum. This amount is subject to fluctuations as determined in accordance with the FBT Act. Details of the available car parks, their locations and cost are included as Appendix A. If you wish to access this benefit, you will need to check availability with the provider before completing the Remunerator application form which can be downloaded from their website. As car parking is payable in advance, this benefit can only commence from the 1 st of the month and cannot be backdated. You may also elect to organise a car parking space on a post tax basis. People and Culture Page 6 of 8

7 10.4 Mobile Devices: If you have a company provided mobile device you cannot salary package the same mobile device for example if you have a lap top provided by the company, you cannot salary package a laptop. Mobile devices may only be packaged where they are used primarily for business purposes. You will be required to sign a declaration to this effect Other Benefits: There is a range of minor benefits that attract lower or no FBT that it is possible to salary package. Salary packaged benefits that are otherwise deductible to you (that is, that you may claim as a deduction in your tax return) do not attract FBT. Examples of these are business related tools, for example caluclators and briefcases and professional membership subscriptions such as CA or CPA Airport lounge memberships are exempt from FBT and may also be salary packaged. Changes to this Policy: This policy will be reviewed from time to time as required. Any changes must be authorised by the Group Director People and Culture. Date prepared/revised: February 2014 Prepared by: Head of Remuneration and Benefits, People and Culture Authorised: Janine Stewart, Group Director People and Culture People and Culture Page 7 of 8

8 APPENDIX A LIST OF CAR PARKING STATIONS (1) Car Park Address Dist to office $ per month Surry Hills 55 Holt Street, Surry Hills 0.1km Goulburn Cnr Goulburn and Elizabeth Streets, Sydney 0.7km Castlereagh 233 Castlereagh Street, Sydney (entry via 332 Pitt Street) Kent 528 Kent Street Sydney 1.4kms Hilton Hotel 259 Pitt Street Sydney (2) 1.5kms $625 $ kms $495 $399 $399 Please note: (1) These amounts are inclusive of GST but not FBT and are subject to annual review effective 1 April. The notional amount of FBT for the FBT year ending 31 March 2014 is $ per month (2) The Hilton Hotel is valet parking As car parking is subject to availability, to ensure there is an available space in your preferred location, please contact Secure Parking on prior to completing your application form. People and Culture Page 8 of 8