Salary packaging (known as Salary Sacrificing) allows you to pay for eligible expenses with pre-tax dollars. It reduces your taxable income and increases the money you take home each week.
You can salary package many items, including motor vehicles, self-education expenses and airport lounge membership. Before salary packaging any item, seek independent financial advice. For more information about the ADF salary packaging, click here.
Benefits
The ADF offers a competitive salary and benefits you won’t find in many other jobs. It includes 16.4% superannuation, free medical and dental, assistance with renting or buying a home, paid training and more. You can also take advantage of salary packaging, which lets you pay for certain items with pre-tax dollars. It reduces your taxable income and increases the amount of money in your pocket.
When packaging a vehicle, it’s essential to consider the residual payment at the end of the term and any ongoing loan/lease payments you may be responsible for. You should consult with your financial adviser or accountant before making any decisions. It’s also essential to understand the impact of unplanned leave on your package arrangements.
Tax
When you receive your salary, the first thing that happens is that income tax (Pay-As-You-Go) is deducted. With salary packaging, you could pay for selected expenses before that happens, reducing your taxable income and leaving more money in your pocket. For more information about the ADF salary packaging, click here.
It’s also worth talking to a financial planner or seeking professional advice before making decisions. And it’s important to note that salary packaging arrangements are subject to changes in relevant legislation and rulings. Where differences occur, you’ll be required to re-negotiate your package. It is especially true for motor vehicles where lease, insurance and rego costs are involved. It can be a costly process when unplanned leave occurs.
Superannuation
As an ADF member, you’ll be entitled to a generous salary and allowances package, free health care on and off base, and the option to buy or rent a home through our Defence Housing Assistance Scheme. Plus, if you have at least four years of service, you’ll be eligible for a subsidised home loan.
Salary packaging is a flexible remuneration tool that allows staff to forgo some of their gross remuneration in return for selected non-cash benefits. It’s usually more effective for people on middle to high incomes. However, it’s not always tax efficient, depending on your circumstances and the types of benefits you choose to sacrifice.
The University encourages staff to seek professional financial advice before salary packaging any element of their gross remuneration. The team can also find further information about salary sacrificing and other fringe benefit tax issues on the Australian Taxation Office (ATO) website. For more information about the ADF salary packaging, click here.
Homeownership
Being in the ADF comes with plenty of financial perks – from allowances to generous superannuation, paid trade qualifications and subsidised accommodation. But there’s also salary packaging, novated leases and home ownership schemes that can help you build wealth and secure your future.
You can salary package interest on mortgage repayments or purchase costs for a house and land in remote areas (provided the property will be your primary residence) under the Remote Area Benefit. For this tax concession, 50% of the interest is treated as an Exempt Benefit so that it can be deducted from your pre-tax salary outside any cap.
This information has been provided as general advice only. You should consider your circumstances and seek professional financial or legal advice before deciding. For further information about salary packaging, visit Maxxia, an authorised representative of McMillan Shakespeare Limited (AFSL No 299054). For NSW Health employees, a share of savings arrangement applies and is administered by Fleet Network.
Salary packaging is an Australian Tax Office-approved incentive that allows Defence staff to increase their disposable income by paying for certain expenses out of pre-tax money at no cost to their employer. It’s a very effective way to help attract and retain high-calibre staff, reduce recruitment costs, decrease staff turnover and improve employee satisfaction.
