You’ve probably heard of salary sacrifice if you work for Queensland Health in Australia, but are you aware of how it might improve your financial circumstances? To assist you make an informed choice, we’ll explain salary sacrifice in this blog post, including what it entails, how it affects QLD Health workers, and its benefits and drawbacks.
What is Salary Sacrifice?
Salary sacrificing (also known as salary packaging) is an arrangement between you and your employer, where you agree to receive less income in exchange for benefits of the same value. The main advantage? These benefits are often paid from your pre-tax salary, which means you could reduce your taxable income and take home more money overall.
Salary Sacrifice for QLD Health Employees
As a Queensland Health employee, you’re entitled to participate in a salary packaging program through an approved provider like RemServ or SmartSalary. These providers manage your salary sacrifice arrangements in line with Australian Taxation Office (ATO) guidelines and Queensland Government policy.
What Can You Salary Sacrifice?
Under QLD Health’s salary packaging policy, you can sacrifice a variety of expenses, such as:
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Everyday living expenses (up to $9,010 per FBT year)
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Meal and entertainment expenses (up to $2,650 per FBT year)
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Novated car leases
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Superannuation contributions
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Remote area housing (if eligible)
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Work-related devices (like laptops and phones)
Key Benefits of Salary Sacrificing
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Tax savings: Reduce your taxable income and potentially pay less income tax.
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Boost superannuation: Sacrificing extra into your super fund could grow your retirement nest egg while also lowering your current tax bill.
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Flexible packaging: Tailor your benefits to suit your lifestyle and financial goals.
How Much Can You Save?
Let’s say you’re earning $80,000 per year. By salary sacrificing your mortgage repayments or rent (up to the cap), you could potentially save thousands in tax each year. The actual amount depends on your income bracket, the benefits you choose, and how much you package.
Are There Any Downsides?
While salary sacrifice can be a smart move, it’s not for everyone. Here are a few things to watch out for:
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Caps and limits: The ATO sets limits on how much you can salary sacrifice without attracting fringe benefits tax (FBT).
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Reduced income: Lenders may consider your post-sacrifice income when assessing loans.
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Administrative fees: Providers charge setup and ongoing fees, which can eat into your savings if not managed properly.
How to Get Started
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Check eligibility: Most permanent full-time and part-time QLD Health staff are eligible, but it’s always good to confirm with HR.
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Choose a provider: QLD Health partners with providers like RemServ or SmartSalary.
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Select benefits: Work out which expenses you want to package.
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Track usage: Keep an eye on your caps and make sure you’re not overspending.
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Review annually: Your financial goals and income may change—so should your salary packaging strategy.