Salary Sacrificing
Employee Information Guide
PREPARED FOR TASMANIAN STATE SERVICE
DECEMBER 2009
Contents
1.
Introduction
1.1
4
Financial Advice
4
1.2 Eligibility
2.
Salary Sacrifice Options
4
5
2.1
3.
Taxation
What Benefits are Available?
5
6
3.1 Fringe Benefits Tax – Exempt Items
4.
Administration
6
7
4.1
Administration of Benefit Funds
7
4.2
Terms and Conditions
7
4.3
Methods of Payment
8
4.4
Reconciliation
8
4.5
Changed Circumstances
8
4.6
Leave
8
4.7
Ceasing Sacrifice
8
4.8
4.9
Reports
Complaint Resolution
9
9
4.10 Portability of Salary Sacrifice Arrangements
5.
Administration Cost
6.
Where To From Here?
7.
Further Information
10
11
12
13
7.1
Access to Website
13
7.2
Privacy Policy
13
Appendix 1:
Appendix 2:
Appendix 3:
Appendix 4:
Appendix 5:
Appendix 6:
7.3 Access to Your Personal Information
Portable Electronic Devices – Laptop/Notebook Computer
Portable Electronic Devices – Mobile Phones and Accounts
Portable Electronic Devices – Portable Printers
Portable Electronic Devices – PDAs, electronic diaries, calculator and
Palm Pilot
Eligible work related Item – Briefcases
Work Related Computer Software
13
14
15
16
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Disclaimer
This publication has been prepared without consideration of the particular investment objectives, financial situation
and needs of individual employees. In all cases, employees should conduct their own investigation and analysis of
the information contained in this Guide. No employee should act on the basis of any matter contained in this Guide
without taking appropriate legal, financial and other professional advice upon his or her own particular circumstances.
Each employee who wishes to take advantage of salary sacrifice is advised to seek financial advice particularly in
relation to income tax issues.
The Tasmanian Government and its departments and agencies (Tasmanian Government) and Maxxia Pty Ltd
(Maxxia), each of their employees and every person involved in the preparation of this Guide expressly disclaim all
liability for any loss or damage of whatsoever kind (whether foreseeable or not) which may arise from any person
acting or relying on any statements contained in this Guide or for any advice given by any salary consultant and
notwithstanding any negligence, default or lack of due diligence and care.
The actions of your employer and Maxxia in paying employment benefits from salary sacrifices to a third party does
not in any way imply a transfer of responsibility or liability to the Employer or Maxxia in relation to any agreement or
understanding between the employee and the third party.
Maxxia provides administration and referral services on behalf of employers. It does not provide any form of financial,
taxation or financial product advice to employees on the relative merits of salary sacrifice programs or on any other
basis. Some information on taxation matters may be provided to illustrate possible advantages, but is of a general
nature only. You should seek your own independent professional advice on how salary sacrifice programs may impact
your particular financial, taxation and welfare benefit circumstances. Maxxia may receive commissions or rebates in
connection with some services it provides or arranges to be provided by third parties. By appointing and utilising
Maxxia services, you consent to its receipt of such commissions and rebates. Tax laws regarding the treatment of salary
benefits may change, which could adversely impact your financial, taxation or welfare benefit decisions.
This disclaimer does not limit or alter those statutory rights that cannot be excluded.
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1. Introduction
The purpose of this Guide is to provide detailed information on the salary sacrifice arrangements for employees who
are eligible to participate. It sets out the complete program of salary sacrifice options and arrangements available to
eligible State Service employees.
The objective of salary sacrifice is to maximise flexibility for individuals to meet their personal and financial needs
while at the same time ensuring that the benefit arrangements comply with relevant taxation legislation and rulings.
Salary sacrifice offers a range of advantages to employees including:
• Making financial decisions based on before tax dollars, not after tax dollars; and
• Allocating salary and optional benefits to suit individual financial and personal situations.
The Income Tax Assessment Act 1936, the Income Tax Assessment Act 1997 and the Fringe Benefits Tax Assessment
Act 1986 together with your employer’s policy regulate and define the type of benefits that can be included in an
employee’s salary sacrifice, how the benefits are treated for taxation purposes, and the administrative arrangements
that apply. This legislation or policy may change from time to time. If changes do occur employees may be given the
opportunity to adjust the structure of their salary sacrificing arrangements to take account of any new requirements.
Fringe Benefits Tax (FBT) was introduced in 1986 to tax the value of fringe benefits provided by an employer to
an employee or associate (related third party) in place of, or in addition to, the employee’s salary or wages. FBT is
payable by the employer on fringe benefits provided to employees. However, the benefit items available under the
Tasmanian State Service Arrangements, can be salary sacrificed free of income tax and fringe benefits tax.
1.1 Financial Advice
It is strongly recommended that employees wishing to commence salary sacrificing obtain independent
financial advice to ensure their remuneration package meets personal and financial requirements.
1.2 Eligibility
Employees of the Tasmanian State Service employed under the Tasmanian State Service Award or The
Health and Human Services (Tasmanian State Service) Award and any subsequent Awards and Agreements
however named that provides for salary sacrifice for business related items are eligible to become a
participating employee in the Tasmanian State Service Salary Sacrifice Arrangements.
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2. Salary Sacrifice Options
In keeping with modern salary practices, employees will have the discretion to determine the mix of salary and
benefits (within the approved list) that will constitute their salary sacrifice arrangement.
Participation in salary sacrifice is voluntary.
The elements of the salary sacrifice are:
• Salary;
• Taxation; and
• Optional benefits.
2.1 What Benefits are Available?
The following benefits are available:
(i) FBT Exempt Benefits
• Laptop/notebook computer (primarily for business purposes)
• Mobile phone and accounts (primarily for business purposes)
• Portable printer (primarily for business purposes)
• Electronic diary/PDA/Palm Pilot/Calculator (primarily for business purposes)
• Briefcases (primarily for business purposes)
• Work related computer software
At your discretion you may nominate an annual amount for each of these benefits and the applicable Fringe
administration fee.
A detailed description of each of the benefits is provided in the Appendices to this Guide.
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3. Taxation
3.1 Fringe Benefits Tax – Exempt Items
These benefit items are either totally exempt or not subject to FBT because they are for predominantly
business purposes, or an employee could usually claim a tax deduction for the expense as an ‘otherwise
deductible item’.
3.2 Income Tax
The salary component of an employee’s remuneration will continue to be subject to Pay As You Go
(PAYG) taxation deductions in accordance with the Income Tax Assessment Act 1936 and the Income Tax
Assessment Act 1997.
3.3 Goods & Services Tax (GST)
GST applies to the cost of each of the approved benefit items. That is, the amount that an employee salary
sacrifices will be the GST inclusive cost of the item.
3.4 Input Tax Credits (ITC)
ITC’s associated with salary sacrificed items will be claimed by each Agency. When the ITC’s are received
from the Tax office, Agencies will return the credits to employees via the payroll system (less PAYG tax).
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4. Administration
The administration of salary sacrifice has been outsourced to Maxxia, a well-established provider of salary packaging
services throughout Australia.
The major functions to be performed by Maxxia in the administration of salary sacrficing are:
• Payment of the selected benefit item(s) in accordance with instructions provided by the employee in the Salary
Sacrifice Application Form;
• Provision of reports to employees;
• Undertaking full reconciliation of salary sacrifice arrangements;
• Obtaining and storing benefit payment substantiation for Australian Taxation Office compliance and
audit purposes;
• Communicating directly with employees in relation to salary sacrificing; and
• Answering queries in relation to salary sacrificing.
The details concerning the administration of salary sacrificing are set out below and should be carefully read prior
to deciding to participate in salary sacrificing.
4.1 Administration of Benefit Funds
Upon commencement of salary sacrificing the following will be deducted on a pro-rata basis from the
employee’s salary:
• The cost of the selected optional benefit(s).
The funds for the selected optional benefit(s) will be provided to Maxxia for disbursement.
Payments for benefit items will only be made where sufficient funds exist at the time the payment is due or
the employee submits a request for payment. Accordingly, when deciding to allocate money to a particular
benefit, employees may wish to provide an additional amount to meet any anticipated increases in the cost of
the payments.
4.2 Terms and Conditions
The following terms and conditions will apply:
• Benefit payments will only be made where Maxxia has received a salary sacrifice deduction;
• Where insufficient sacrifice funds are available to cover a payment, no benefit payment will be made;
• All benefit payments will cease immediately for those employees that terminate or are on leave without pay where alternative arrangements have not been made;
• Employees are only permitted to sacrifice benefits which form part of the employer’s approved
sacrifice menu;
• An employee may request for any unspent funds to be returned to the employee through the payroll system when a change is made to the salary sacrifice; and
These terms and conditions may be updated from time to time.
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4.3 Methods of Payment
REGULAR PAYMENTS
Benefit(s) that have a fixed instalment amount and occur on a regular basis (e.g. finance repayments for the
purchase of a laptop/notebook computer) will be paid as a regular payment. The following details should be
provided for these payments.
• Name and address of where payments should be made;
• Frequency of the payments;
• Payment amount;
• Commencement date for regular payments; and
• BSB and account number for regular direct EFT and payments.
NON REGULAR PAYMENTS
These payments are for benefit(s) that do not have a fixed instalment amount, or do not occur on a regular
basis (e.g. reimbursement of an employee’s original purchase of an item). Payments will be made on
receipt of a completed Reimbursement Claim Form. Note that a separate Salary Sacrifice Claim Form for
Work Related Items and process has now been established for those benefit items that must be used for
predominantly business purposes.
An employee who pays directly the cost of a benefit(s) will be reimbursed on receipt of a completed
Reimbursement Claim Form. In the case of the Salary Sacrificing Claim Form for Work Related Items, the
form must be signed off by the Employee’s Manager and also confirming that the item is for predominantly
business purposes. Reimbursement will be by electronic funds transfer (EFT) to the employee’s nominated
bank or credit union account.
Non-regular payments and reimbursements will be made by Maxxia, subject to the employee having sufficient
sacrifice funds, within two business days of receiving an employee’s request. Please note that the bank may
take another few days to clear funds.
4.4 Reconciliation
A reconciliation of the salary sacrifice will occur when an employee alters their salary package.
Any balance remaining in an employee’s salary sacrifice account on termination of employment will be paid
as salary and taxed accordingly.
Where Maxxia pays any expense that relates to the employee’s salary sacrifice, which is in excess of the
amount nominated, the employee will be required to repay such an expense.
4.5 Changed Circumstances
An employee may alter their salary sacrifice arrangement at no cost during the FBT year (i.e. 1 April to 31
March of the next year).
4.6 Leave
An employee may be required to cease or suspend any salary sacrifice arrangements during any period
of unpaid leave. In most instances approval of any period of leave without pay will require the employee to
cease or suspend salary sacrificing.
The employee should notify Maxxia where an employee’s salary sacrificing arrangements will be affected as a
result of the approval of paid or unpaid leave. Where possible this notification should be provided prior to the
commencement of the leave period to enable the necessary administrative arrangements to be made.
4.7 Ceasing Packaging
An employee may elect at any time to cease salary sacrificing by giving at least twenty-eight (28) days notice
in writing to Maxxia.
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In all circumstances where an employee’s salary sacrificing arrangements cease, it is necessary that the
employee notify Maxxia of their cessation date. This enables Maxxia to send final payments and determine
any action to be taken with account balances.
Any unspent funds will be returned to the employer who will arrange for these funds to be returned to the
employee via the payroll system. Note that these funds will be subject to PAYG taxation.
Any additional costs incurred as a result of termination of an employee’s salary sacrifice arrangements must
be paid by the employee and will be deducted from the employee’s final termination payment.
Any salary sacrifice arrangements will cease in the event that an employee is suspended without pay or when
employment is terminated.
4.8 Reports
Employees participating in salary sacrifice will receive quarterly reports in hard copy that provide details
on payments made for selected benefit items.
In addition the following online transaction reports are available:
• Account Balance Report – shows the salary sacrifice account balance at the time of accessing the report; and
• Transactions in Last 90 days – lists the salary sacrifice contributions received and details of payments made during the last 90 days.
The instructions for accessing online reports by the internet will be provided to the employee at the
commencement of salary sacrificing.
Employees can obtain an account balance by phone between the hours of 8.00am – 6.00pm (EST/EDST)
by calling Maxxia on 1300 123 123.
4.9 Complaint Resolution Procedure
The following service resolutions procedures must be followed where an employee has a need to raise a
service concern. Throughout these stages, Maxxia is committed to ensuring that regular liaison is undertaken
with the employee.
Stage 1
The employee should contact Maxxia by telephone on 1300 735 363. The employee should provide as much
detail as possible. If the matter cannot be resolved immediately it will be referred to the appropriate Maxxia
staff member for a response time. The timing of the response will be determined by the complexity of the
matter. Maxxia will provide within 24 hours of receipt of the service concern a timeframe for the resolution of
the matter.
Stage 2
If a response is not delivered or is not resolved to the employee’s satisfaction, the matter should be referred
in writing to the Customer Relations Team via facsimile number (03) 9635 0011 or email: [email protected]
providing all relevant details. Maxxia will provide within 24 hours of receipt of the employee’s correspondence
a timeframe for the resolution of the matter.
Stage 3
If the employee has undertaken Stages 1 and 2 and has not had the matter resolved to their satisfaction,
the matter can be referred by the employer or the employee to the Maxxia Complaints Manager, who will
investigate the matter further. Maxxia undertake to respond to the matter to the employee within ten working
days. The Maxxia Complaints Manager can be contacted as follows:
The Complaints Manager
Locked Bag 18, Collins Street East
Melbourne VIC 8003
Tel: 1300 735 363
Fax: (03) 9635 0011
Email: [email protected]
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Stage 4
If the matter is still outstanding after Stage 3 the details will be referred by the employee, the employer or the
Complaints Manager to the Operations Manager at Maxxia who will liaise with the employer or a third party,
as necessary, to finalise the matter.
4.10Portability of Salary Sacrifice Arrangements
It is the responsibility of participating employees transferring on a permanent or fixed term basis between
Agencies to provide advice direct to Maxxia via one of the methods listed under, “How can employees advise
Maxxia of changes” listed on page 12. Failure to notify Maxxia of such a change may lead to a delay in
payments of monies to employees or associated third parties.
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5. Administration Cost
Employees who choose to participate in salary sacrificing will be required to include within their salary sacrifice
arrangement at the relevant administration cost.
Administration Fee Description
Annual Fee (including GST)
Salary sacrificing any single FBT-free item, for any participating Client.
$70.00
Salary sacrificing more than one FBT-free item.
$105.00
Please note that where an employee salary sacrifices for less then twelve (12) months between 1 April and 31 March
of the following year, Maxxia shall be entitled to receive one hundred (100) per cent of the annual administration fee.
Amendment fee
An employee may make one changes to existing salary sacrifice arrangements in an FBT year (i.e. 1 April to 31 March
of the next calendar year) free of charge. A second and subsequent change will incur a fee of $55 (including GST) for
each change.
A change to an employee’s salary sacrifice arrangements, which alters the amount deducted each pay cycle is
deemed as a change that can incur an amendement fee, where one change has already been made.
Changes to bank account information and personal contact details including contact telephone numbers and
address information, do not incur amendment fees.
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6. Where To From Here?
If you wish to enquire about salary sacrificing, call the Maxxia consultancy service on 1300 123 123.
If you wish to salary sacrifice complete the Salary Sacrifice Application Form and forward directly to Maxxia at the
following address or scan and email to [email protected].
Maxxia Pty Ltd
Locked Bag 18
Collins Street East
MELBOURNE VIC 8003
Upon receipt of the completed Salary Sacrifice Application Form, Maxxia will process the information and forward
to you confirmation of the arrangements that will be put in place.
Alternatively, telephone Maxxia’s Customer Care Centre on 1300 123 123 for assistance in the establishment of
your package.
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7. Further Information
A toll-free enquiry service has been established to provide information to employees in relation to salary sacrificing.
This service does not provide financial advice. However, the operators can assist with general information regarding
the salary sacrifice options that are available.
The enquiry service operates from 8.00 a.m. to 6.00 p.m. (EST/EDST) Monday to Friday.
General Enquiries: 1300 123 123
Website Address: www.maxxia.com.au
7.1 Access to Website
General information about salary sacrifice is available at www.maxxia.com.au.
Specific information including this Guide, Application Forms and Declarations are available by logging in with
the following user id and password:
USER ID: TASMANIAN
PASSWORD:
GOVERNMENT
All participating employees can also access their salary sacrifice reports online using the Internet. The
instructions for accessing online reports will be provided when you commence salary sacrificing.
7.2 Privacy Policy
Maxxia is bound by the National Privacy Principles of the Privacy Amendment (Private Sector) Act 2000.
Maxxia has stringent procedures in place to ensure the strict confidentiality of personal client information.
Maxxia’s Privacy Policy regulates the type of personal information we collect as well as the use of the personal
information. Your personal information is used by Maxxia to provide you with salary sacrifice administration.
Maxxia may also use this information to keep you informed of new Maxxia products and services.
You can obtain a copy of the Maxxia Privacy Policy by contacting us. Alternatively you can obtain a copy of the
Privacy Policy from our website at www.maxxia.com.au.
7.3 Access to Your Personal Information
Under the National Privacy Principles you are generally entitled to access the personal information Maxxia
holds about you. You can request access to your personal information by writing directly to Maxxia at:
The Privacy Officer
Maxxia Py Ltd
Locked Bag 18
Collins Street East
MELBOURNE VIC 8003
Or email Maxxia at [email protected].
Where you are entitled to obtain access to your personal information, the time we require to give you access
will depend on the type of information requested. In some circumstances we may charge you a fee for
providing access to your personal information. The fee will be based on our costs in locating the information
and the form of access you require. In all cases we will provide you with an estimate of the fee so that you
can confirm that you still require access to your personal information.
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Appendix 1:
Portable Electronic devices
– Laptop/notebook Computer
DESCRIPTION
An employee may salary sacrifice the cost of one (1) laptop or notebook computer
per FBT year (i.e. 1 April to 31 March of the next calendar year), where the laptop
or notebook computer is to be used primarily for business purposes.
What is Allowed?
• An employee may include only one laptop or notebook computer within their
salary sacrifice during each FBT year.
• The ATO considers the primary characteristics of a laptop or notebook computer
to be that they are relatively small in size, easily portable and can be operated
without an external power source.
• The computer can include built-in internal (i.e. modem and fax cards) and
external equipment necessary for the basic operation of the computer (i.e. a
mouse), or pre-loaded software forming part of the overall computer sacrifice,
(i.e. where there is no separate charge or clearly identifiable additional cost).
• The computer can be purchased outright or acquired through a hire purchase,
lease arrangement or a personal loan.
• Where a computer is acquired through a hire purchase or personal loan, only
the original cost may be included within the salary sacrifice.
• Repairs, maintenance, software expenses, USB cables, external modems and
gaming software may not be included within the salary sacrifice under this
benefit item.
Taxation Issues
• One laptop or notebook computer per FBT year is an exempt fringe benefit and
is not reported on the employee’s payment summary as a fringe benefit.
• To obtain the FBT exemption for a laptop/notebook computer, it must be used
primarily for business purposes.
• The Goods and Services Tax applies to laptops or notebook computers.
• Input Tax Credits are available.
Substantiation
• Employee must submit purchase documents indicating the make and model,
clearly showing that the item is a laptop and not a desktop computer.
• An employee must submit the original receipt/tax invoice for reimbursement
of expenses.
• An employee must provide evidence where a leasing arrangement is included as
part of the salary sacrifice.
Employee
Declaration
• Where the employer has agreed to continue to make a laptop/notebook computer
as an available benefit after the May 2008 Federal Budget, the employee must
complete the ‘Salary Sacrifice Claim Form for Work Related Items’.
Form of Payment
• Reimbursement to employee where original receipt/tax invoice has been
forwarded to Maxxia.
• Regular direct payments for the computer lease payments only.
Sacrifice Cost
The cost of the laptop or notebook computer and administration cost.
Additional
Information
Where input tax credits are available, a tax invoice must be submitted with the
claim form.
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Appendix 2:
Portable Electronic Devices
– Mobile Phones and accounts
DESCRIPTION
• An employee may salary sacrifice the cost of a mobile telephone and
associated call costs where the mobile phone is used primarily for
business purposes.
• The mobile telephone must be a portable telephone and operate externally
and independently of an employee’s home telephone.
What is Allowed?
• The cost of the mobile telephone plus associated call costs.
• Mobile telephone accessories such as a carry pouch or hands free kit may also
be included.
• Only one (1) mobile phone can be salary sacrificed in an FBT year.
Taxation Issues
• Mobile phones and account costs are not reported on the employee’s payment
summary as a fringe benefit.
• To obtain the FBT exemption for a mobile phone it must be used primarily for
business purposes.
• The Goods and Services Tax applies to mobile phones and accounts.
• Input Tax Credits are available.
• Fringe Benefits Tax does not apply.
Substantiation
Submit the original receipt/tax invoice and a claim for reimbursement of
expense incurred.
Employee
Declaration
Where the employer has agreed to make a mobile phone an available benefit after
the May 2008 Federal Budget, the employee must complete the ‘Salary Sacrifice
Claim Form for Work Related Items’
Form of Payment
Reimbursement to employee where the original receipt/tax invoice and a completed
claim form has been forwarded to Maxxia.
Sacrifice Cost
Cost of the mobile phone, call costs, and any accessories and administration costs.
Additional
Information
Where input tax credits are available, a tax invoice must be submitted with the
claim form.
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Appendix 3:
Portable Electronic Devices – Portable Printers
DESCRIPTION
An employee may salary sacrifice the cost of a portable printer, provided it is used
primarily for business purposes.
What is Allowed?
• The portable printer must be designed for use with a laptop/notebook or similar
portable computer.
• A portable printer is unlike a conventional printer which may be portable yet
is not designed specifically to have the purpose of being used with a portable
computer.
• Only one (1) portable printer can be salary sacrificed during an FBT year.
• The portable printer does not have to be salary sacrificed in conjunction with a
laptop/notebook computer.
Taxation Issues
• The cost of a portable printer is not reported on the employee’s payment
summary as a fringe benefit.
• The Goods and Services Tax applies to portable printers.
• Input Tax Credits are available.
• Fringe Benefits Tax does not apply.
Substantiation
Submit the original receipt/tax invoice and a claim for reimbursement of
expense incurred.
EmployeeDeclaration
Where the employer has agreed to continue to make a portable printer an available
benefit after the May 2008 Federal Budget, the employee must complete the ‘Salary
Sacrifice Claim Form for Work Related Items’.
Form of Payment
Reimbursement to employee where the original receipt/tax invoice and a completed
claim form has been forwarded to Maxxia.
Sacrifice Cost
Cost of the portable printer and administration costs.
Additional
Information
Where input tax credits are available, a tax invoice must be submitted with the
claim form.
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Appendix 4: Portable Electronic Devices
– PDAs, electronic diaries, Calculator and Palm Pilot
DESCRIPTION
An employee may salary sacrifice the cost of a Personal Digital Assistant (PDA),
electronic diary, palm pilot, calculator or similar handheld device, provided the
device is used primarily for business purposes.
What is Allowed?
• The cost of the PDA, electronic diary, palm pilot, calculator or similar
handheld device.
• A PDA is a hand held wireless device designed for use as a personal organiser
which may or may not have other computing capabilities.
• Only one (1) PDA, electronic diary, palm pilot or similar handheld device can be
salary packaged during an FBT year.
• MP3 players and iPods do not qualify under this benefit and are not exempt from
Fringe Benefits Tax.
Taxation Issues
• The cost of a PDA, electronic diary, palm pilot or similar handheld device is not
reported on the employee’s payment summary as a fringe benefit.
• The Goods and Services Tax applies to PDAs, electronic diaries, palm pilots or
similar handheld devices.
• Input Tax Credits are available.
• Fringe Benefits Tax does not apply.
Substantiation
Submit the original receipt/tax invoice and a claim for reimbursement of
expense incurred.
Employee
Declaration
Where the employer has agreed to continue to make PDAs, Electronic Diaries and
Palm Pilots as available benefits after the May 2008 Federal Budget, the employee
must complete the ‘Salary Sacrifice Claim Form for Work Related Items’.
Form of Payment
Reimbursement to employee where the original receipt/tax invoice and a completed
claim form has been forwarded to Maxxia.
Sacrifice Cost
Cost of the PDA, electronic diary, palm pilot or similar handheld device and
administration costs.
Additional
Information
Where input tax credits are available, a tax invoice must be submitted with the
claim form.
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Appendix 5: Eligible work related Item – Briefcases
DESCRIPTION
An employee may salary sacrifice the cost of a briefcase where it is to be used
primarily for business purposes.
What is Allowed?
The cost of the briefcase. Only one (1) briefcase can be salary packaged
each FBT year.
Taxation Issues
• The cost of a briefcase is exempt from FBT and is not reported on the
employee’s payment summary as a fringe benefit.
• The Goods and Services Tax applies to the cost of a briefcase.
• Input Tax Credits are available.
• Fringe Benefits Tax does not apply.
• Only one (1) briefcase can be salary sacrificed each FBT year.
Substantiation
Original receipts/tax invoices must be submitted when seeking reimbursement of
the cost of the briefcase.
Employee
Declaration
Where the employer has agreed to continue to allow briefcases as an available
benefit after the May 2008 Federal Budget, the employee must complete the ‘Salary
Packaging Claim Form for Work Related Items’.
Form of Payment
Reimbursement to employee where the original receipt/tax invoice and a completed
claim form has been forwarded to Maxxia.
Sacrifice Cost
Cost of the briefcase and administration costs.
Additional
Information
Where input tax credits are available, a tax invoice must be submitted with
the claim form.
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Appendix 6:
Eligible Work Related Item – Computer Software
DESCRIPTION
An employee may salary sacrifice the cost of work related computer software.
What is Allowed?
The cost of the computer software.
Taxation Issues
• The cost of computer software is exempt from FBT and is not reported on the
employee’s payment summary as a fringe benefit.
• The Goods and Services Tax applies to the cost of computer software.
• Input Tax Credits are available.
• Fringe Benefits Tax does not apply.
Substantiation
Original receipts/tax invoices must be submitted when seeking reimbursement of
the cost of the computer software.
Employee
Declaration
Where the employer has agreed to continue to allow computer software as an
available benefit after the May 2008 Federal Budget, the employee must complete
the ‘Salary Packaging Claim Form for Work Related Items’.
Form of Payment
Reimbursement to employee where the original receipt/tax invoice and a completed
claim form has been forwarded to Maxxia.
Sacrifice Cost
Cost of the computer software and administration costs.
Additional
Information
Where input tax credits are available, a tax invoice must be submitted with the
claim form.
SALARY SACRIFICE – EMPLOYEE INFORMATION GUIDE | TASMANIAN STATE SERVICES
EIG TSS | V1 | 1209
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