EXECUTIVE DIRECTOR,
DSC
Effective: 24/07/2014
Application of this Policy
This document will apply to employees of the Anglican Church Southern Queensland not otherwise covered
by a provision within an Award, Certified/Workplace/Enterprise Agreement or a policy less favourable than
stated herein. It does not apply to Clergy because of the unique tax treatment for such roles and
reference should be made to the relevant section/s of the Diocesan Handbook.
Not all Agencies of the Diocese may have an ATO status that provides for all aspects of Salary Sacrificing
and a check should be made via an ABN search.
Definitions
Total Remuneration Package (TRP):
•
TRP = Base Salary + Flexible Benefit Components
•
TRP recognises and reports all remuneration package components that are seen as
remuneration items for each staff member, i.e. remuneration package. The TRP
components will include:
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o at least 50% Base Salary;
o Flexible Benefit Components.
•
Base Salary is the cash component of the remuneration package, and represents the amount
of TRP remaining after allocating funds to Flexible Benefit Components and Non-Flexible
Components. The Base Salary is subject to Pay As You Go (PAYG) tax instalment
deductions and included in an individual’s income tax return to calculate income tax and
Medicare Levy.
•
At least 50% of TRP must be in the form of Base Salary.
Fringe Benefits Tax (FBT)
•
Fringe benefits tax (FBT) is the tax levied by the Australian Government for certain benefits
provided by the Anglican Church Southern Queensland to employees. The rate should be
verified via the ATO web-site. Items which are reportable for fringe benefits tax purposes
will be shown on the end of year payment summary as a grossed up figure. This is then
used for calculation of certain obligations or Government benefits. It is for this reason that
financial advice is recommended.
Flexible Benefit Components
•
Flexible Benefit Components are those non-cash options to which employees can choose to
allocate their pre-tax earnings. These items will reduce Base Salary (and hence PAYG tax)
as shown on an employee’s Payment Summary and may be reported as a fringe benefit on
the Payment Summary.
Flexible Salary Packaging
•
The Flexible Salary Packaging approach allows employees to negotiate their TRP
composition to reflect their own lifestyle and spending habits and in some cases utilise some
tax effective opportunities. Flexible Salary Packaging is also known as salary sacrifice. The
Australian Tax Office definition of salary sacrifice is:
•
“…where an employee foregoes part of the salary he or she would otherwise receive, in
return for other benefits. In a salary sacrifice, the employees income tax and tax instalment
deductions are based on the reduced salary, and although the employee is not liable to
© Anglican Church Southern Queensland
Effective: 24/07/2014
Review Date: 24/07/2016
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Base Salary
EXECUTIVE DIRECTOR,
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Effective: 24/07/2014
income tax on the benefit, the employer may be subject to fringe benefits tax on the value
of the benefit …”
In other words, salary sacrifice arrangement is the allocation of pre-tax dollars from an employee’s TRP
to fund the provision of benefits.
Purpose Statement
Anglicare SQ is committed to a Total Remuneration Package (TRP) approach to salary packaging
which gives employees the opportunity to structure their own salary package around a selection of
benefits that reflect their own specific lifestyle choices. This approach to remuneration
management will be cost effective for both Anglicare SQ and its employees.
Anglicare SQ is concerned regarding its responsibility as both a Corporate Citizen and will not be
seen to abuse a privilege of FBT exemptions as a Public Benevolent Institution. This is balanced
against providing ready access to the benefit.
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Operational aspects, options and choices available to employees are contained within the ‘Salary
Packaging – the clever way to make the most of your pay’ Booklet from RemServ and available via the
Diocesan Web-site and ASQ Intranet - INsite.
Policy Statement
All Full-time and Part-time employees covered by Certified Agreements, Awards or Common Law
Contracts are able to access salary packaging. (Casual Employees will not have access to the
provisions of Salary Packaging).

Allow flexibility in salary packaging

Greater consistency/equity within the organization

The communication of the full value/cost of pay and benefits to staff

Salary Packaging is one mechanism to attract and retain employees where Market rates may
not be possible
Anglicare SQ is providing this policy for the use of employees should they wish to enter into salary
packaging arrangements.

Salary Packaging is one mechanism to attract and retain employees where Market rates may
not be possible. While it may assist individuals to increase their disposable income through
the reduction of PAYG Tax, it is not the intention that it be used to negate the payment of any
PAYG Tax that is used by the Government to provide for the social infrastructure within our
Society

ACSQ does not support staff exceeding the grossed up Cap and has instructed RemServ to
monitor individual’s salary packaging arrangements to contain expenditure within such limits.
This does not impact on any Exempt Fringe Benefits. Anglicare SQ Payroll and RemServ have
been directed to monitor this function and restrict it as necessary. Ultimate responsibility
stills resides with the employee to ensure compliance.

It is not legally bound by any of the salary packaging information contained in this policy to
provide benefits nominated by employees, nor should the provision of the document be seen
as encouragement by the organisation for employees to enter into salary packaging
arrangements.

ACSQ strongly recommends that all employees seek professional financial planning advice
prior to commencing with salary packaging option.
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Effective: 24/07/2014
Review Date: 24/07/2016
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Anglicare SQ is committed to:
EXECUTIVE DIRECTOR,
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Effective: 24/07/2014
Procedure (Roles, Responsibilities & Action)
Employee Obligations
Individuals need to ensure that the choices they make are in their best interest and within their
financial means.
Employees should be aware that Fringe Benefits Tax (FBT) may apply where the grossed up value
of benefits packaged exceed the provisions applied to different Agencies by the ATO.
To make the TRP program sustainable, employees will need to work within the guidelines of this
policy, with particular attention to administration requirements and deadlines for the submission
of Forms.
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A limit has been established regarding the mix of Base Salary and the selection of discretionary
Flexible Benefit Components. Employees must take at least 50% of TRP as base salary.
Employees should be aware that choosing to take a large amount of their remuneration package
as benefits may mean they have insufficient cash salary to meet their day to day requirements.
Therefore, employees should obtain financial advice before entering into salary packaging
arrangements.
Anglicare Southern Queensland’s Obligations
The Anglican Church Southern Queensland will monitor corporate vehicle usage and remind
employees who need to increase the kilometres travelled. It will remain the employees’
responsibility to take appropriate action, otherwise FBT will be incurred and will be payable by
the employee.
Of particular concern to the Organisation is its responsibility as both a Corporate Citizen and
being seen to not abuse the privilege of FBT exemptions as either a Public Benevolent Institution
or Rebatable Organisation. This is balanced against providing ready access to the potential
benefit.
Where the Anglican Church Southern Queensland is entitled to claim an input tax credit (GST
refund) the Anglican Church Southern Queensland will retain these funds.
Eligibility
The Anglican Church Southern Queensland offers flexible salary packaging to all eligible
employees covered by Awards or Certified Agreements providing for Packaging and all Common
Law Contracts (Salaried Staff). Eligible staff that choose not to participate in flexible salary
packaging will continue to be paid as per their current employment provisions.
Flexible Benefit Components are optional and may be varied from time to time to suit career
and lifestyle commitments.
The advantages of the TRP approach are:
•
the Anglican Church Southern Queensland can offer more market competitive and
employee responsive remuneration practices;
•
the remuneration package can be tailored to meet employee specific lifestyle needs;
•
the Anglican Church Southern Queensland is better able to retain and attract valuable
personnel;
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Effective: 24/07/2014
Review Date: 24/07/2016
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The Anglican Church Southern Queensland reserves the right to change its TRP and packaging
approach at any time due to commercial considerations. Should such changes become necessary,
the Anglican Church Southern Queensland will provide prior notification to affected employees.
EXECUTIVE DIRECTOR,
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Effective: 24/07/2014
•
the full value of the remuneration package is known and visible to both the employee and
the Anglican Church Southern Queensland;
•
this approach is cost effective to the Anglican Church Southern Queensland and to the
employee.
Flexible Benefit Components
Employees can choose a range of Flexible Benefit Components within the parameters of their
remuneration. By choosing to have flexible benefits in a package, the employee may
lower/increase their Base Salary resulting in a lower/higher taxable salary for PAYG purposes.
Employees can choose flexible options provided the following guidelines are adhered to:
•
The selection of funds to be allocated to Flexible Benefit Components should be determined
after careful consideration of the impact this decision will have on Base Salary and therefore
on the amount of cash received by the employee. It is each employee’s responsibility to
ensure they are left with adequate funds to support their day to day lifestyle and at least
50% of TRP as base salary.
•
The total cost of non-cash benefit items cannot exceed 50% of each employee’s TRP.
•
Employees must salary sacrifice sufficient funds in advance prior to incurring the expense.
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Procedures and Administration
To effectively administer a Flexible Salary Packaging approach, a number of procedural matters
have been established. The Anglican Church Southern Queensland has outsourced the packaging
administration to a third party. The cost of administering on behalf of an individual will be borne
as part of the employee’s TRP.
During a period of unpaid leave, employees will be provided with the option to either:
•
Discontinue flexible remuneration arrangements whereby the cost of any flexible benefit
components will be met by employee; or
•
Accrue sufficient funds in their salary packaging account prior to leave commencing to cover
the flexible benefit component during a period of leave.
Salary Packaging with an Anglican Church Southern Queensland provided Motor
Vehicle or Novated Lease
Employees who are provided with a vehicle which includes private use or enter into a Novated
Lease will have the value of this fringe benefit included in the $30,000 grossed up limit.
Employees should be aware that the usage of the vehicle impacts on this value and should ensure
that the vehicle travels the required number of kilometres each year. The Anglican Church
Southern Queensland Finance Department will monitor kilometres, but it remains the
employee’s responsibility to be aware of the required amount of travel and to ensure that this is
achieved. FBT may be payable, by the affected employee, if insufficient kilometres are travelled.
Where travel is insufficient, an adjustment to the amount salary packaged may be necessary to
avoid breaching the cap limit.
Salary Package Account Balances
Prior to the end of the FBT year (31 March), the Anglican Church Southern Queensland will
estimate whether employees are able to package an additional amount within the $30,000 limit
(and 50% of the TRP). This may be the case where an employee is in receipt of a salary packaged
vehicle and the number of kilometres travelled exceeds the estimated kilometres such that a
lower FBT value applies.
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Effective: 24/07/2014
Review Date: 24/07/2016
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Leave Without Pay
EXECUTIVE DIRECTOR,
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Effective: 24/07/2014
Where this is likely to be the case, the Anglican Church Southern Queensland will notify the
employee 3 months prior to the end of the FBT year of the amount that may be packaged within
the $30,000 limit.
Where the estimate is incorrect and the employee exceeds the $30,000 limit the employee is
required to meet the cost of FBT from their package.
Taxation Advice
The above information is intended to provide broad guidelines only. Please note that the
Anglican Church Southern Queensland is not providing financial or tax advice either directly or
indirectly to any employee or associate of any employee.
The Anglican Church Southern Queensland encourages employees to seek personal financial
advice in establishing appropriate packaging levels.
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Payment of Fringe Benefits Tax
•
Pay the required amount immediately in full to the Anglican Church Southern Queensland
upon request; or
•
Increase the salary packaged amounts to allow for payment of the FBT liability over a
maximum of 10 Fortnights for payment to be made to the Anglican Church Southern
Queensland in full on completion of the 10 fortnight period.
References & Related Documents
Relevant Legislation / By-Laws / Standards
Commonwealth
Queensland
Australian Tax Act
All Policy & Procedures are to be adhered to in accordance with Diocesan Governance Requirements
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Effective: 24/07/2014
Review Date: 24/07/2016
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In the event that an employee exceeds their cap limit, FBT will be payable by the employee.
Where sufficient funds are held in the salary packaging account, these funds can be authorised to
be provided to the Anglican Church Southern Queensland Finance Department for payment of
the FBT. Where insufficient funds are held, the employee is obliged to either: