Salary Packaging FAQ

Put simply, choosing to salary package with RSL Care means you can pay considerably less income tax than you currently do and so will have more money to spend on things important to you.

To take it to the next level, assuming you are an Australian resident, when you work for RSL Care, you current receive the first $6,000 in income before you pay any income tax (averaged over a year). If you choose to salary package with RSL Care, essentially a further amount of up to $16,050 which you earn (pro-rata for part-time work), is available to you without paying income tax.

The federal government recognises that not-for-profit (charitable) organisations such as RSL Care are very important providers of services to the Australian community and are usually very dependent on funding from government and donations to provide those services.

Because this funding is limited and with that, such organisations are limited in their ability to provide high wages to staff as well as to provide high quality and widespread services to our community, the government has granted organisations like RSL Care the ability to be able to offer staff more attractive 'after tax' pay options than other organisations (commercial organisations, government departments, etc).

The government views this as a positive way of assisting organisations like RSL Care to attract and retain staff in spite of limited access to funding.

You may have heard about salary packaging from other people and other organisations. You should be aware that the salary packaging which RSL Care is able to offer is much more financially beneficial to staff than is the case with for-profit and government organisations because of our special charitable status.

Salary Packaging is simply getting your employer to pay for expenses on your behalf from your Gross Salary rather than you paying for them with your take home pay using Fringe Benefit Exempt Salary Packaging offered to RSL Care.

You have more money to allocate to things that are important to you.

All permanent full-time and permanent part-time employees can participate.

With 100% of the benefit provided to staff under our current Collective Agreement, there are no financial benefits to RSL Care. The major benefit for RSL Care is that the company can provide you with the opportunity to have as much money as possible to spend from your wage/salary.

In essence, you can choose to have up to $617 of your income each fortnight allocated to one of a number of payments and that money will be paid without having to incur income (or other) tax.

You can allocate the money between any/all of the following:

• Mortgage/home loan
• Rent
• Personal loan
• Community Services Banking Card (debit card which is designed specifically for not-for-profit employees and which we will assist you to organise).

$16,050 per fringe benefit tax year.

Yes – the Fringe Benefit tax year is from 1 April through 31 March whereas the Financial year is from 1 July through 30 June.

The Community Services Banking Card has been specifically designed for not-for-profit (or benevolent institution) employees to access tax free expense payment fringe benefits. It can be used anywhere in the world to pay for everyday expenses, through EFTPOS facilities by selecting “Credit”. However, unlike other credit cards, the Community Services Banking Card does not provide credit and cannot be used to draw cash advances.

The Community Services Banking Card works by transferring a specific amount from either your fortnightly or monthly fringe benefit entitlement by RSL Care into your card. You can then use your card to pay for your expenses. Expenditure amounts will be limited to the available funds on the card. The Community Services Banking Card may also be used to set up periodical payments.

Any remaining unspent monies on the Community Services Banking Card will be carried forward each month. However, there may be adverse tax implications if you have a credit balance at the end of each Fringe Benefit Tax Year (31 March). You are therefore advised to have a zero balance on the card as at 31 March.

On termination (including termination of employment with RSL Care or of the card), unspent monies on the Community Services Banking Card will be returned to RSL Care and will be re-payed to you and taxed according to PAYG taxation laws.

Further information regarding the Community Banking Card can be found at: http://www.csbanking.com.au/

All of your existing Award and or Certified Agreement employee entitlements will be maintained when you enter into a salary package. Your accrual and entitlement hours will be unaffected.

The savings you will achieve will depend on your personal circumstances and the mix of benefit items you include in your package. You should refer to the Salary Packaging simulator to calculate your estimated savings.

You may contact RSL Care with any queries. However, you must be aware that RSL Care cannot give you any financial advice.

The common traps are:

• Over packaging – not having enough take home pay to meet other expenses you may have;
• Poor planning and misjudging your personal circumstances;
• Poor advice and misunderstanding of the concepts.

It is strongly recommended that you seek professional Independent Financial Advice who is familiar with FBT-exempt salary packaging available only to Public Benevolent Institutions, especially if packaging for the first time.

Generally you will gain a financial advantage from salary packaging. The advantage depends on your salary level and the type of benefit being packaged.

A 'Salary Packaging Calculator' is available on CareNet. You can see how salary packaging will affect you by simply putting in your fortnightly gross wage and the amount you wish to package. If your working hours fluctuate on a regular basis then you will need to average your fortnightly salary over the previous six (6) pays to gain an estimate of your fortnightly gross wage.

Nothing changes. Payroll continues to process pays as normal. The only change to your payslip will be a new line entry identifying the value of benefits being packaged by Salary Packaging.

There is absolutely no obligation for you to salary package. If at any time in the future you decide you would like to participate, RSL Care will be pleased to provide you with the opportunity.

Yes, there is an agreement that you will enter into which is solely between you and RSL Care. The agreement is the “Salary Packaging Agreement” which outlines the terms and conditions under which RSL Care offers you Salary Packaging and the broad choice of benefits to select from. This agreement is available from CareNet or your site Administration.

Yes, at this time Salary Packaging is limited to the range of benefits identified in the Salary Packaging Guideline.

No. The full value of your fringe benefit will be recorded separately as “Reportable Fringe Benefits” on your payment summary (group certificate). The benefits (up to a maximum of $16,040 per annum) are provided to you free of income tax.

The fringe benefits that you receive may have an effect on some payments and benefits. For example, the fringe benefits reported on your payment summary will be used to calculate liability for child support agency obligations and HECS repayments, and may impact on your entitlement to certain income-tested government benefits and concessions. For this reason, it is strongly recommended that you seek professional independent financial advice.

No. RSL Care does not charge any administration fees in relation to salary packaging.

Salary packaging arrangements continue during periods of leave. If you wish to change these arrangements then you will need to suspend or reduce the salary packaging arrangement by completing another Salary Packaging Authority Form and sending to Payroll four (4) weeks prior to your leave.

Each fringe benefit has a 'Reportable Fringe Benefit'. This is shown as a grossed-up taxable value and is noted on your payment summary (group certificate).

The grossed-up taxable value of a benefit is the salary that you would have to earn in order to purchase the benefit from after-tax dollars. As previously stated, the maximum fringe benefits you can access through RSL Care is $16,050 per fringe benefit tax year. The grossed-up taxable value of this benefit equals $30,000.