Salary Packaging And Allowance Arrangements Flashcards
Explain the difference between permanent and temporary tax advantages
Permanent: when a tax benefit is concessionally taxed or exempt from FBT, attracting a lower tax rate than the employees marginal rate
Temporary: when expense payments are otherwise deductible to employee and can be from pre-tax pay. Produces a temporary tax advantage ( the tax deduction benefit is received earlier than annual income tax return)
Define allowances. Who gets them and give 3 common examples
Allowances are specific payments for employees are identified as not being wages. Do not involve a sacrifice of existing cash salary
Given to people who: do certain tasks or skills
2. Use own tools at work
3. To work in unpleasant or dangerous conditions
Eg. uniforms and special clothing
Tools and equipment
Travel and fares
Car - covers petrol, tyres, oil and repairs
Phone
First Aid
Supervisor
Living away from home
What are 3 common benefits of salary sacrifice?
Voluntary Superannuation contributions, expense payments and motor vehicles