Salary Sacrifice May Affect Superannuation And Some Government Benefits
It's important to understand the potential implications of entering into a salary sacrifice arrangement with your employer. The following may apply to you:
- You pay a lesser amount of income tax on the reduced amount of salary or wages you receive
- Your employer may be liable to pay fringe benefits tax on the non-cash benefits provided
- Salary sacrificed super contributions are classified by your super fund as employer contributions rather than your own. This reduces the amount of superannuation guarantee contributions that your employer is required to make for you
- Your employer may be required to report certain benefits on your payment summary. The value of these reported benefits is taken into account in assessing your eligibility for the Medicare levy surcharge, for some tax offsets, for child support payments, and for assessing entitlement to some government benefits.