Salary Packaging Providing options on how to use your money Remuneration Services (Qld) Pty Ltd ABN:46 093 173 089 Authorised Representative (No. 293159) of McMillan Shakespeare Limited (AFSL No. 299054) Reliance Insurance Brokers Pty Ltd (AFSL 345986) Swann Insurance (Aust) Pty Ltd (AFSL No. 238292) AVEA Insurance Limited (AFSL No. 238279) and Auto & General Services Pty Ltd (AFSL 241411) Level 13 60 Edward Street Brisbane Qld 4000 GPO Box 424 Brisbane Qld 4001 Tel: 1300 30 39 40 Fax:1300 301 866 E-mail: remserv@remserv.com.au
About this booklet This booklet provides information on salary packaging arrangements for organisations that attract rebatable FBT. It has been written specifically for you as an employee of Anglican Church Southern Queensland. Salary packaging is allowed under the Income Tax and Fringe Benefits Tax Assessment Acts and through Anglican Church Southern Queensland. Remuneration Services (Qld) Pty Ltd () has been appointed to manage the administration services for salary packaging for Anglican Church Southern Queensland employees. This booklet has been prepared with no consideration of your specific financial investments, situations or requirements. In all cases, you should individually review and assess the information contained in this booklet based upon your own particular circumstances. Anglican Church Southern Queensland and, its administrators, partners, agents and/or employees and disclaims all liability and are hereby released and indemnified from and against all actions, claims, demands and proceedings whatsoever, (whether foreseeable or not) notwithstanding any negligence, default or lack of due diligence and care from any person, which may arise in connection with the salary packaging arrangement, information contained in this booklet or advice given by a consultant. This booklet is current at April 2014. More information Further information is available on the website at http://www.remserv.com.au. The user name for downloads is dao. You can also phone our call centre between the hours of 8:00am to 6:00pm (Queensland time) Monday to Friday on 1300 30 39 40. Remuneration Services (Qld) Pty Ltd This work is copyright. It may be reproduced in whole or in part for Anglican Church Southern Queensland purposes subject to the inclusion of any acknowledgement of the source and no commercial usage or sale. Reproduction for the purposes other than those indicated above, requires the prior written permission from Remuneration Services (Qld) Pty Ltd. Requests and enquiries concerning reproduction and rights should be addressed to Remuneration Services (Qld) Pty Ltd, GPO Box 424, Brisbane QLD 4001. Privacy Policy: is committed to adhering to National Privacy Principles (NPP) 1-10 as defined by the Office of the Federal Privacy Commissioner in accordance with the Privacy Act 1988. V4.12 Contents What is Salary Packaging?... 3 Salary Packaging Benefit Options... 4 Payments and Services... 16 Taxation... 18 Appendix 1 Salary Packaging Card Options... 7 Appendix 2 Glossary of Terms... 21 Page 2
What is Salary Packaging? What can I package? Salary packaging is a tax effective way of receiving your salary as a combination of income and benefits. Salary packaging allows you to deduct some of your pre tax income and use it to pay for benefits. By reducing your pre tax income you can reduce the amount of income tax you pay and increase the amount you take home each fortnight. Your own circumstances will determine whether salary packaging will be a benefit to you. There are tax implications which will make some benefit items unattractive for some people, so it is recommended that you discuss your chosen benefits with your financial adviser. You have a choice of which benefits to package. In accordance with Anglican Church Southern Queensland s status as a FBT rebatable employer, the total grossed-up value of the fringe benefits provided to an employee is capped at $30,000 per FBT year. You are eligible for the FBT threshold, which allows FBT to be rebated at 48%. You may package benefit items costing between $14,421 and $15,900 in total (depending on the impact of GST) for the Fringe Benefits Tax (FBT) year ending 31 March. In addition to the FBT threshold cap you may also package FBT exempt benefits. Superannuation packaging will be arranged direct through Anglican Church Southern Queensland in relation to the employer superannuation funds that are administered by the Anglican Church Southern Queensland. What does it cost? The administration fees you pay are inclusive of GST and are as follows: Salary packaging any combination of benefits including a novated motor vehicle lease Salary packaging any combination of benefits excluding a novated motor vehicle lease Salary packaging a single otherwise deductible or work related benefit item (such as briefcase or journal subscription) for one pay only Salary packaging the Salary Packaging Payment Card only $229.58 per year payable as $8.83 per fortnight $210.60 per year payable as $8.10 per fortnight $55.00 per year $170.00 per year payable as $6.54 per fortnight Fee Structure if Ceasing Packaging If you are doing full salary packaging and terminate, cease packaging, or packaging is on hold within a 12 month period from your anniversary date, the following package year administration fees will apply to cover the costs of departmental and ATO reporting requirements: 8 months or less of package year 75% of annual fee amount deducted 9-12 months of package year 100% of annual fee amount deducted Page 3
Financial Advice It is strongly recommended that you seek independent financial advice if you choose to take up full salary packaging. You should discuss the adviser s fees before selecting your financial adviser. has a list of advisers available. Whilst has performed an accreditation process to gain an understanding of the experience and technical expertise of the accredited advisers on the web site listing, employees should not regard members of the accredited panel as being endorsed by their employer or Remuneration Services (Qld) Pty Ltd. What do I do next? 1. Review this booklet for which benefits might be of interest to you. 2. Contact our Client Establishment Team on 1300 73 66 62. OR 3. Complete the appropriate forms and send the forms (original copies) to: GPO Box 424 Brisbane QLD 4001. Salary Packaging Benefit Options The tables that follow summarise the benefits available to you for salary packaging. You should consider which items will be attractive to you while considering the cost and tax implications of each item and discuss these with your financial adviser where applicable. You should not exceed the limits set for salary packaging by Anglican Church Southern Queensland. Details of each benefit are then listed on the following pages. Page 4
The following benefits may be packaged within your FBT cap. Benefit Item FBT Status Tax Deductible Benefit GST Status Reportable Fringe Benefit Aged and Disabled Care Payments Full No No Yes Car Parking Full No Yes Yes Child Care Fees (non employer owned) Full No No Yes Club/Association Membership Subscriptions (non work-related) Full No Yes Yes Credit Card payments Full No No Yes Financial Adviser Fees Full/Exempt Yes/No Yes Yes/No HELP/School Fees Full No No Yes Health Insurance Full No No Yes Home Mortgage Full No No Yes Home Rentals Full No No Yes Motor Vehicle Operating Expenses Full No Yes Yes Personal Loan Repayments Full No No Yes Private Travel Full No Yes Yes Salary Packaging Payment Card Full No No Yes Savings/Investment Schemes Full No No Yes Third Party Expenses Full No Yes/No Yes Trauma/Life Insurance Premiums Full No No Yes Utilities Full No Yes Yes Page 5
The following benefits may be packaged in addition to your FBT cap limit. Benefit Item FBT Status Tax Deductible Benefit GST Status Reportable Fringe Benefit Airport Lounge Membership Exempt Yes Yes No Car Parking Fees Exempt No Yes No Disability/Income Protection Exempt Yes Yes No Home Office Expenses Exempt Yes Yes No Portable Electronic Devices (primarily for work related purposes) Exempt Yes Yes No Professional Memberships/Subscriptions Exempt Yes Yes No Self-Education Expenses Exempt Yes Yes/No No Tools of Trade Exempt Yes Yes No Work Related Travel Expenses Exempt Yes Yes No Motor Vehicle Novated Lease Concessional No Yes Yes Page 6
Appendix 1 Salary Packaging Card Options Card benefit type Features How it works Salary You apply to for the card Packaging Payment Card No credit checks No card fees Transaction details provided online Phone banking available Funds must be cleared by end of FBT year Can be used wherever Visa is accepted transfers funds onto your card each fortnight for you to use for your everyday living expenses. More information is available below and in the fact forms at www.remserv.com.au. Automated Expense Commonwealth Bank MasterCard Credit Card You apply to the Commonwealth Bank if you do not already have a Commonwealth Bank MasterCard Standard bank credit checks apply Standard bank fees and charges apply depending on the card type chosen Transaction details provided through the Bank s website, phone banking and statements Following your authorisation, uploads your transactions and makes payments back to the card from your salary packaging. More information is available below and in the fact forms at www.remserv.com.au. Your own credit card Standard bank credit checks apply Standard bank fees and charges apply depending on the card type chosen Transaction details provided through the Bank s website, phone banking and statements can make on request or regular payments based on the provision of your credit card statements showing transactions. More information is available below and in the fact forms at www.remserv.com.au. For more information about card options, please refer to the information below and the fact forms available on the website. Page 7
Salary Packaging Benefit Items Aged and Disabled Care Payments You may package this benefit if you have expenses for parents, partners or dependents who need nursing care because of old age or physical or mental disability. The options for payments of this benefit are direct payment to the supplier or reimbursement to you. Airport Lounge Membership You can salary package this benefit if it is directly related to your employment and you are already a current member. The options for payments of this benefit are direct payment to the supplier or reimbursement to you. An expense benefit declaration is required for payment of this benefit. Car Parking You can salary package the cost of parking your car. Car parking is normally a benefit which attracts full FBT. Only in certain circumstances can car parking be treated as an exempt benefit. The options for payments of this benefit are direct payment to the supplier or reimbursement to you whether you pay this as a deduction from your pay or as an ordinary bill payment. Car Parking - Exempt You can salary package the cost of parking your car as exempt from FBT if the following conditions are satisfied: Parking must be provided at business premises located within one kilometre of a commercial parking station, which charges a fee exceeding a specified threshold; The car is not parked at a commercial parking station; The employer is neither a public company nor a subsidiary of a public company on the day on which the benefit is provided; The employer is not a government body of a State or of a Territory; and The employer s ordinary and statutory income for the last income year ending most recently before the start of the FBT year is less than $10m. The option for payment of this benefit is direct payment to the supplier. More information and the declaration is included in the Car Parking Exempt Fact Form. Child Care Fees (non employer owned) Your fees in relation to childcare supplied by a registered childcare provider not located on your employer s premises can be salary packaged. The options for payments of this benefit are direct payment to the supplier or reimbursement to you. Page 8
Club / Association Membership Subscriptions (not work related) You can elect to package memberships to clubs and associations that are not related to your work. These attract full FBT. The options for payments of this benefit are direct payment to the supplier or reimbursement to you. Credit Card Payments Automated Expense Benefit MasterCard Credit card payments may be made from salary packaging but are deemed to be an expense payment. Cash advances cannot be salary packaged. Payments can be to your credit card or a credit card of your spouse or dependent. A convenient way to package expenses on a credit card is through the Commonwealth Bank MasterCard arrangement with. This is an automated process where pays for your credit card through your salary packaging. To participate in the automated card payment process you are required to apply for and be issued with a Commonwealth Bank MasterCard and sign an authorisation allowing the transactions on the card to be accessed by. This is an automated process where pays for your credit card purchases through your salary packaging. Your use of the Card is required to be in accordance with the provisions of this booklet, Anglican Church Southern Queensland policy, and the CBA MasterCard Terms and Conditions. By using the Card you will have accepted the terms and conditions of the card and policies in respect of this card. You can also package other credit cards through the manual payment process (see next section for other card payment arrangements). How to access the benefit: Complete the Commonwealth Bank Credit Card Application Form - selecting a Commonwealth Bank MasterCard - and take it to any branch of the Commonwealth Bank along with identification documentation (for example, drivers licence (40 points), birth certificate (70 points), current passport (70 points). If you already have a Commonwealth Bank MasterCard, you may choose to use it as your card for automated payment. Complete the Transaction Privacy Consent Form as part of your salary packaging application (including the CBA MasterCard Credit Card details). This authorises to inform the Commonwealth Bank that they have your consent to download electronically all transactions on your Commonwealth Bank MasterCard. will make payments fortnightly based on the normal pay cycle. Should the credit card expense be due prior to the payment from you will be able to make payment to the credit card to avoid any bank fees or charges. What you need to know: If the card is used for cash advances, those transactions and the payment of those transactions will be your responsibility. Your application for a CBA MasterCard is subject to the Commonwealth Bank s normal lending procedures and criteria. If you are not successful in your application for a CBA MasterCard you are unable to access the automated payment arrangement. Page 9
You have a choice of the type of CBA MasterCard you wish to select. A corresponding annual Bank fee may apply. If a fee is applicable, you may wish to either pay this fee from post tax dollars or you may package this fee under the Credit Card Payments benefit. It is important to keep your card in a secure place. The liability for the card is with the Card holder. You will receive normal credit card transaction statements which itemise transaction details. You can obtain the account balance and available credit amount 24 hours / 7 days a week from CBA by phone, internet banking and ATMs. If your card is lost or stolen, you are liable for the use of the card until you notify the Commonwealth Bank. You cannot use your card after it has been cancelled. You pay for expenses using your CBA MasterCard Credit Card. You may choose to maintain a payment in advance safety net on your card without impacting the payments made by. For Credit Card related information call Commonwealth Bank Card Services on 13 2221. For any disputed transaction on your credit card call Commonwealth Bank Card Services on 13 2221. Credit Card Payments Credit card payments may be made from salary packaging but are deemed to be an expense payment. Cash advances cannot be salary packaged. Payments can be to your credit card or a credit card of your spouse or dependent. You can choose to package your credit card by sending in your statement each month or as a regular payment set up. If choosing to send in the statement each month, you should advise the amount you wish to be paid against the statement. To set up a regular payment for the credit card, substantiation of previous purchases is required. For example, two employees each wish to put $550.00 towards the credit card each fortnight. Susan sends in 12 months statements which show total purchases (excluding cash advances) of $15,000 in the year. This is enough to pay $550 per fortnight over 26 fortnights ($14,300 in total for the year). James sends in 4 months statements which show total purchases (excluding cash advances) of $3,000. He wants to pay $550 per fortnight to his credit card, but cannot do this on a regular basis long term as payments up to only the value of $3,000 can be made. James will need to send in further statements to show more purchases made if is to pay the full amount of $550.00 per fortnight for the whole year. Both Susan and James will need to submit further statements once payments are made in full against the substantiation provided on application. The options for payments of this benefit are direct payment to the credit card supplier. You can also request a reimbursement into your bank account. A declaration is required if packaging this benefit. Page 10
Disability & Income Protection Insurance You can choose to package payment of your disability and income protection insurance premiums. The options for payments of this benefit are direct payment to the insurance company or reimbursement to you. Financial Adviser Fees You can package your salary packaging financial adviser fees. Financial advice on investments is classified as FBT exempt where it is otherwise tax deductible. Financial fees for the initial meeting cannot be packaged as no financial gain has been received at this time, however fees incurred after the initial meeting can be packaged. All other financial adviser fees attract FBT. The options for payments of this benefit are direct payment to the financial adviser as a one off or regular payment or reimbursement to you. You will need to add the Financial Adviser Fees Fact Form and required attachments for this benefit. This fact form is available in the downloads section at www.remserv.com.au when you complete your application. Health Insurance You may choose to salary package the premium costs associated with private health insurance for you and your dependents. The amount you package should not include the amount that the Government pays as a rebate. The options for payments of this benefit are direct payment to the insurance company on a one off or regular basis or reimbursement to you. HELP (Higher Education Loan Programme) / School Fees - external You may package HELP/School fees incurred by yourself, your partner or spouse or a dependent. HELP/School fees are only packageable when you have an invoice from the School/University or an ATO remittance. The options for payments of this benefit are direct payment to the School/University or reimbursement to you. Home Mortgages You may salary package your owner occupied home mortgage. The amount packaged can be your repayment of both principal and interest. Investment property mortgages cannot be packaged. If you have a draw down facility on your mortgage you must not draw on any funds paid into the mortgage from your salary packaging. You will need to complete the Loan Draw Down Declaration and submit this with your application if you have a home mortgage even if you do not have or do not use a draw down facility. The options for payments of this benefit are direct payment to your mortgage account on a regular basis or reimbursement on a regular basis to you. You should contact once salary packaging deductions have started if you require a specific date for to begin payments to your mortgage. Page 11
Home Office Expenses You may package expenses related to running a home office, however it should be noted that special taxation laws apply regarding assets such as computers. The options for payment of this benefit are direct payment to the supplier or reimbursement to you. Home Rental If you rent your home, you may include your rental payments in your salary packaging. To package home rental, it must be your primary place of residence. The options for payments of this benefit are direct payment to your landlord on a regular basis or reimbursement to you. You should contact once salary packaging deductions have started if you require a specific starting date for your rental payments to begin from salary packaging. Payments will be made for the duration of the lease agreement. Further confirmation will be required for payments to be made beyond the lease end date. Motor Vehicle Operating Expenses (for Non-Novated Private Use Vehicles) You may choose to package items associated with the operation and ongoing maintenance of your privately owned motor vehicle. Payment for these items can only be made where there are sufficient funds in your trust account. For example, if your annual registration is due close to the date of commencement of your salary packaging, there may not be sufficient funds to pay the registration from the trust account. Operating expenses do NOT include traffic fines or licences. The options for payment of this benefit are direct payment to the supplier or reimbursement to you. Novated Lease Motor Vehicle Please refer to the Novated Leasing and Motor Vehicles information booklet for specific information regarding novated leasing of a motor vehicle. Novated leasing of a motor vehicle is an FBT concessional benefit allowed under the salary packaging arrangement, however it is important that you are aware of the terms and conditions of your lease and the FBT implications. The employee contribution method (ECM) will be allowed under the salary packaging arrangement. This method allows you to make a contribution towards the running costs of the vehicle from your after tax salary, which reduces the FBT liability on the vehicle by the same amount. A fuel card must be provided when packaging a novated lease. You must include fuel as part of your packaging application in the Motor Vehicle Operating Costs section. Fuel and other operating costs may be included in some lease types. You should also review the requirements for payments. In some cases it is necessary for you to make the first payment for your vehicle. Page 12
The financier will provide a quotation or schedule and the Deed of Novation. These documents should be submitted with your application. How is this benefit paid? Once the Deed of Novation is signed by you, your employer and the financier, a payment book or invoice is issued to manage each payment. In some cases the payment book or invoice will be sent directly to you by the financier. If this happens it should be forwarded to as quickly as possible to avoid delay of payments. Personal Loan Repayments Personal loan repayments can be chosen as a salary package benefit. The loan must be in your name or joint names. A personal loan in the name of another person is only payable if you can provide evidence that you are legally responsible (eg a court order) for the loan repayments. The options for payment of this benefit are direct payment to the loan on a regular basis or regular reimbursement to you. Credit cards may not be packaged under this category. Portable Electronic Devices (primarily for work related purposes) Changes in the Australian Federal Government Budget on 13 May 2008 have altered the status of laptop computers, electronic diaries and mobile phones for salary packaging. To claim one of these items as FBT exempt requires a declaration that it is for primarily (ie more than 50%) business use. You will need to sign the declaration and arrange for your immediate supervisor to provide his/her details and declaration on the work use. You are also required to keep a diary of the actual usage of the device for at least one month. This diary may be called upon by, the employer, or the Australian Taxation Office to further support the usage to which the portable electronic device is put. More information and the declaration is included in the Portable Electronic Devices Fact Form. This fact form is available at www.remserv.com.au. Private Travel Expenses Private holiday travel for you and your dependents may be packaged. This includes fares, accommodation and other travel related expenses, but excludes entertainment and meals. The options for payment of this benefit are direct payment to the supplier or reimbursement to you. Professional Memberships and Subscriptions You can package memberships and subscriptions to professional associations that relate to your work. The options for payment of this benefit are direct payment to the supplier or reimbursement to you. An expense benefit declaration is required for payment of this benefit. Page 13
Salary Packaging Payment Card The Salary Packaging Payment Card is an easy way to pay for your everyday living expenses like groceries, travel and clothing and can be used wherever Visa is accepted. The card is issued directly through. You can arrange for a secondary card for your partner or spouse if you wish. You use the card in the same way you use a credit card. Expenses on the card are included in your salary packaging cap limit. The card can be used for: Purchases for any item, wherever Visa card is accepted; Over the phone bill payments; and Internet payments where a card number is required. The card cannot be used for: Direct debit or regular transaction set ups; BPay or internet banking payments; Cash withdrawal from an ATM or with purchases using the Salary Packaging Payment Card; or Overseas transactions. More information and the ANZ application form is included in the Salary Packaging Payment Card Fact Form. This fact form is available at www.remserv.com.au. Savings / Investment Scheme (non-superannuable contributions) You can package contributions to a managed investment fund, which is structured on a unitised basis. The investment insurance product must be provided by an approved life company and the policy must: i. Have a minimum term of not less than 10 years; ii. Be held under a trust pursuant to where The policy is not able to be terminated within 10 years; And the premiums paid on the policy are not able to be accessed, borrowed against or withdrawn within 10 years except in special circumstances involving serious financial difficulties suffered by the rulee; iii. May provide for a payment in respect of death or disability; iv. Be treated as paid up if the premium payments are discontinued for any reason and will be continued so that the policy will be in force for at least 10 years before the proceeds are paid out; v. Have no direct or indirect loan back arrangements attached to it. Payment of this benefit is as a direct payment to the savings scheme. You must include the Saving/Investment declaration if packaging this benefit item. Page 14
Self Education Expenses Self-education expenses that relate to your current employment activities can be salary packaged. The options for payment of this benefit are direct payment to the supplier or reimbursement to you. An expense benefit declaration is required for payment of this benefit. Third Party Expenses You may salary package donations or contributions to organisations such as churches or other institutions that do not provide tax deductibility or for any other expense within FBT expense guidelines. It is important to note whether GST applies as this has implications for your total FBT free limits. Tools of Trade Payment for this benefit can be as a direct payment to the organisation or reimbursement to you. Please note that direct payment will be by cheque unless account details can be verified by the organisation receiving the payment. You can salary package work related expenses such as briefcases, calculators and tools of trade. Computer software used for work purposes is allowable. Protective clothing such as lab coats and aprons or compulsory uniforms and protective footwear can also be included in salary packaging. The options for payments of this benefit are direct payment to the supplier or reimbursement to you. An expense benefit declaration is required for payment of this benefit. Trauma / Life Insurance Premiums Your packaging can include payments to a recognised insurance provider for trauma or life insurance coverage for yourself, your spouse and / or your dependents. For those life insurance premiums that contain an investment component, the policy must contain a life insurance component and the investment component of the premium must be bona fide directed towards a long-term investment strategy. The options for payment of this benefit are direct payment to the insurance company or reimbursement to you. Utilities Electricity, gas, telephone expenses, body corporate fees, cable services and council rates can be packaged under this category. Repairs and maintenance cannot be packaged under this category. There is no GST payable on local government rates. Please note that rates and insurance for investment properties cannot be packaged. The options for payment of utilities are direct payment to the supplier, or reimbursement to you. Page 15
Work Related Travel Expenses You may package work related travel expenses. Payments and Services The payment options for this benefit are direct payment to the supplier, or reimbursement to you. An expense benefit declaration is required for payment of this benefit. How packaging begins will commence payments of benefits based on the amounts agreed by Anglican Church Southern Queensland and your application details. How payments are made Regular payments Regular benefit payments will be processed within three working days of receiving the payroll amounts or on the required date, assuming sufficient funds are held in the trust account held on your behalf. Miscellaneous payments If you have selected benefits that are irregular (eg electricity account or home office expenses), payments will be processed within three working days once you have submitted your account for direct payment or account and receipt for reimbursement, assuming there are sufficient funds in the account. A Payment/Reimbursement Claim Form may also be downloaded from the website at http://www.remserv.com.au through the changes and requests link. Copies of accounts and receipts and any required declaration forms can be attached to this form. Send your payments to: By post:, GPO Box 424, Brisbane QLD 4001 By fax: 1300 301 866 Irregular payments and reimbursements will be made as quickly as possible where there are sufficient funds in the account. Please note that regular payments, such as novated lease payments or own home mortgage payments will take precedence over requests for ad hoc payments or reimbursement requests unless requested in writing by you. What you need to know about payments Payments can only be made when appropriate substantiation has been provided. A minimum balance of $100.00 must be retained in your trust account. Please note that your first benefit payments may need to allow for this minimum balance. Payments for novated leases will only be paid after two fortnightly contributions have been received. You may be required to meet the initial payments for your novated lease prior to sufficient funds building in your trust account. You cannot claim reimbursement for benefits paid for prior to commencement of packaging. This does not apply for regular credit card payments. No benefit payments will be made if there are insufficient funds. If there are no funds forwarded to by your pay office, then you are responsible for any regular payments due. Page 16
All benefit payments will cease immediately if you terminate employment or are on leave without pay. Payments are made by electronic funds transfer or cheque. You should remember to include your bank account details on your application and on your reimbursement request form. Please be aware that any bank fees payable, due to incorrect account details provided by you, will be deducted from your salary packaging account. Where a benefit has an end date or is completed once the total of payments is reached, you should advise if you wish to have your pay deduction amount adjusted. The pay deduction will remain the same unless you advise to reduce it once the final payment has been processed. When ceasing a package which includes a novated lease, please allow additional time for payments to be finalised. All payments to fringe benefit tax reportable items require a corresponding FBT provision amount. Please see your financial adviser if you are not sure about your packaging amounts and your own financial circumstances. Statements Pay history statements are provided on a monthly, quarterly or annual basis. In addition, read only access to your pay history report via the web site is available. You may access your individual pay history 24 hours per day, 7 days per week using personal identification number (PIN) provided by with your first statement. This user name and PIN can also be provided to you, once deductions have commenced, by the call centre team on 1300 30 39 40. Making changes Changes to your packaging may be made at the beginning of each FBT year (1 April). Two changes per year to full packaging will be permitted without penalty, but further changes to your package amount will incur a fee of $55.00. Fees will not be charged, however, in one of the following situations if approved by your employer: inclusion of a non salary sacrifice benefit (NSSB) such as a motor vehicle; separation of the employee from their spouse; death of a partner or spouse; divorce; ill health; extended leave including parental leave; substantial change to the your salary (decrease of more than 10%); or any legislative change that impacts upon flexible salary packaging. If your salary increases during the salary package year, the fortnightly deduction amount does not automatically change at that time. Forms for making changes and requests are available from the website at http://www.remserv.com.au. When requesting an amendment a Salary Packaging Amendment form should be used. It is recommended that you discuss your package costs with your financial adviser when setting up your novated lease. If you do not reach the required kilometres or if your budget estimates were too conservative to cover all your expected expenses, you Page 17
should review your packaging amounts with your adviser and submit a Salary Packaging Amendment Form with the new calculations attached. If your number plate is changed on the same vehicle, you should notify so that the calculations are managed correctly. Your fuel card will also need to be reissued if your number plate changes. What happens at the end of the year? If a package is not fully spent at year-end, any credit balance will be left in your salary package account and rolled over into the new package year. Ceasing packaging You may choose to cease salary packaging at any time by giving at least twenty-one days notice in writing to. Taxation Any funds remaining in your trust account on termination or cessation of salary packaging cannot be taken as a cash payment they must be utilised for benefit payments or may be returned through payroll by to be paid as salary and taxed accordingly. If you terminate employment with Anglican Church Southern Queensland, must be notified immediately by you as all FBT liability will need to be calculated up to your date of termination. Please note: If you have undertaken a novated lease and you terminate your employment with Anglican Church Southern Queensland it is your responsibility to continue to pay your novated lease payments. You should also allow time for the final FBT calculations to be carried out. Salary packaging and tax deductions Any item packaged from pre tax dollars cannot be claimed as a deduction on your next tax return. Fringe Benefits Tax (FBT) Please refer to the Benefit Tables above to determine the FBT, GST and Reportable Fringe Benefit status of the available benefits. Your employer is required to keep records of the fringe benefits provided to you and must record the grossed-up value of those benefits on your group certificate/pay summary for the corresponding income tax year. Grossing-up ensures that the amount of tax paid on a fringe benefit is the same as the tax paid if you receive cash salary, which is taxed at the highest marginal rate (47%), which includes the Medicare levy. Gross up rate for items attracting GST 2.0802 Gross up rate for items without GST 1.8868 The gross-up rate of 1.8868 is used in calculating the reportable fringe benefit amount which appears on your payment summary (group certificate). For example, a private Page 18
health insurance fringe benefit of $2,200.00 will be grossed-up to $4,150.96. The FBT payable on such a payment would be $1,950.95. Where FBT is payable, FBT provision will be held for you to meet your liability at the end of the FBT year. FBT Rebatable Status The Fringe Benefits Tax Assessment Act and Income Tax Assessment Act regulate and define the type of benefits that you can package and how they are treated for taxation purposes. Anglican Church Southern Queensland is treated as a rebatable employer and therefore falls under the new tax reform guidelines. Rebatable employers are certain non-profit organisations that are eligible for a rebate of 48% of the amount of FBT that would otherwise be payable. As part of the Federal Government s tax reform package, rebatable FBT treatment for certain public educational institutions and not-for-profit institutions is limited to an annual grossed-up amount of $30,000 per employee. If the total grossed-up value of the fringe benefits provided to an employee exceeds $30,000, a rebate cannot be claimed for the FBT liability on the excess amount. With the FBT rate currently 47% and the rebate rate of 48% applicable up to the cap limit, a grossed-up value of $30,000 equates to fringe benefits costing up to $15,900 (excluding the impact of GST) for the FBT year ending 31 March. This amount will vary where GST is applicable and whether the employee receives other non salary tax benefits. FBT Example Mortgage of $5000 is salary packaged. Full FBT is applicable. Mortgage Paid $ 5,000 FBT $ 4,434 Less Rebatable FBT ($2,128) Packaged Item Cost $ 7,306 You or your adviser must include provision for FBT as part of the packaging so that the funds are available for submission to your employer each quarter. Reportable fringe benefits and Government allowances The reportable fringe benefits total will not be included in your taxable income or affect the amount of standard Medicare levy you pay. The total will, however, be used for income tests such as: Medicare levy surcharge HELP repayments Child support obligations Entitlement to certain income tested government benefits. The reportable fringe benefits total will be taken into account in the income tests for some other benefits but will include the non grossed up value. This includes benefits such as: Page 19
Family Tax Benefit Child Care Benefit Youth Allowance (parental income test). For further details please contact the Tax Information Line 13 28 61 (toll free) or through the ATO assist web site www.ato.gov.au. GST input tax credits You must package enough to pay the applicable GST on any item you select. If GST applies to a benefit item, then the tax invoice must be submitted to. will then pass the relevant information to your employer and these will be claimed by your employer. Page 20
Appendix 2 Glossary of Terms Term Explanation FBT Fringe Benefits Tax. Currently 47% Grossed up GST GUTV Novated lease Post tax income Pre tax income Grossing-up ensures that the amount of tax paid on a fringe benefit is the same as the tax paid if you receive cash salary which is taxed at the highest marginal rate (47%), which includes the Medicare levy. The gross up rate is either 2.0802 (where GST is incurred) or 1.8868 (where GST is not incurred). Goods and services tax Grossed up taxable value Lease arrangement (usually for motor vehicles) which sets up an agreement between you, your employer and the financier. Please see the Novated Lease Booklet for information about salary packaging a novated lease motor vehicle. Salary received after the income tax has been deducted Salary amount before the income tax deduction Page 21