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Do I earn enough?

Almost anyone can benefit from salary packaging

Salary packaging could benefit all income earners - no matter how much (or how little) they get paid.

As long as you're paying income tax, salary packaging could reduce your taxable income and reduce the amount of tax you pay - putting more in your pocket at every pay cycle. 

For example an employee in the health sector:

  • who earns $20,000 could save up to $1,317 each year
  • who earns $40,000 could save up to $1,767 each year.

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How do I claim?

Three ways to claim your salary packaging benefits

1. Set up automatic payments where possible

The easiest way to claim benefits is to set up automatic payments for items such as mortgage, rent or credit card payments. This allows us to take care of it all for you. And you avoid any extra paperwork.

Once you've provided initial documentation to verify the expense (e.g. home loan records), your job is done. 

2. A Salary Packaging Payment Card makes it easy

For living expenses, such as groceries and clothing, the Salary Packaging Payment Card is a convenient option.

You use it like a credit card - except the funds are drawn from your salary packaging account. Just swipe, sign and go.

3. How to submit a paper claim

If you don't have a Salary Packaging Payment Card - or if you've already paid for the item - you can submit a paper claim for reimbursement.

Please remember to always keep your proof of purchase (typically a tax invoice or receipt).

  • visit the forms section and download a claim form
  • complete the claim form and attach your proof of purchase
  • upload your documents using our form upload tool, email to remserv@remserv.com.au or mail to: RemServ, GPO Box 424, Brisbane QLD 4001

Once received, we'll process your claim within 2-5 business days and deposit the funds from your salary packaging account into your regular bank account.

We will also send you a confirmation email on the same day.

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How will my HELP/HECS debt impact my salary packaging?

Salary packaging with a HELP/HECS debt

You can benefit from salary packaging even if you have a HELP (Higher Education Loan Program) or HECS (Higher Education Contribution Scheme) debt.

Understanding your 'adjusted taxable income'

Although salary packaging can reduce your taxable income (for the purpose of paying income tax), it can increase the gross value of your salary.

This is referred to as your 'adjusted taxable income'.

So your adjusted taxable income equals your salary plus the gross value of your fringe benefits (e.g. $40,900 + $17,000 = $57,900)

How your adjusted taxable income impacts HELP and HECS repayments

The ATO assesses you on your 'adjusted taxable income' when working out how much you should pay in HELP or HECS repayments.

So with an increased gross salary, you may need to increase your regular HELP or HECS repayments.

Otherwise you may end up with a bill at tax time.

A salary packaging and HELP/HECS debt example

Without salary packaging With salary packaging
Ryan earns $50,000 each year Lisa earns $50,000 each year
He is taxed $9,300* She salary packages $9,095 in rent payments, including $241.28 in administration fees
Ryan's HELP payment is $2,000 Lisa is taxed $6,366*
He then pays $9,095 in rent> Her HELP payment is $2,605
His take home pay is $29,605 Her take home pay is $31,714
Lisa is $2,109 better off than Ryan because she has paid an extra $605 towards her HELP debt (or an extra $23.30 each fortnight).

* Includes PAYG, Medicare and Flood Disaster Levy (where applicable)

Before you start…

Before you start salary packaging, please tell your payroll department to take additional HELP or HECS repayments from your salary.

Please also seek financial advice if you're unsure.

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How will salary packaging affect my pay?

A simple explanation

This is what happens to your pay once you've set up a RemServ salary packaging account.

  • each pay cycle, your employer's payroll department deducts a nominated portion of your salary before tax is applied - and sends those funds to us
  • you can then use these funds to pay for your chosen benefits (e.g. Living expenses, Mortgage payments, Meal Entertainment etc.)
  • the rest of your salary gets taxed. However, because some of your salary has been taken out (to pay for your chosen expenses), you are taxed on a lower amount
  • your post-tax salary is then deposited into your bank account as usual.

By getting taxed on a lower amount and effectively paying less tax, your disposable income is increased. This leaves you with more to spend at each pay cycle.

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Is it too good to be true?

Hundreds of thousands of Australians benefit from salary packaging every year

Salary packaging is an extremely popular way to get more out of your pay.

Many employers within the private and public sector offer salary packaging as an incentive to retain and reward their staff.

The types of benefits you can salary package, and how much, depends on what your employer offers, as well as, what the Australian Taxation Office (ATO) allows for your particular industry.

Rest assured our tax and compliance specialists keep up-to-date with ATO rulings and developments in Fringe Benefits Tax legislation to ensure we are across any changes to salary packaging which may affect you.

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Is salary packaging easy to manage?

We take care of the hassles. You enjoy the benefits.

After we set up your salary packaging arrangements, we also manage them for you. This means that we pay for your nominated expenses on your behalf - using your pre-tax dollars.

That's right. You don't even have to remember to pay your bills!

A simple process at every pay cycle

  • each pay cycle, your employer's payroll department deducts a nominated portion of your salary before tax is applied - and sends those funds to us
  • you can then use these funds to pay for your chosen benefits (e.g. living expenses, mortgage payments, Meal Entertainment etc.)
  • the rest of your salary gets taxed. However, because some of your salary has been taken out (to pay for your chosen expenses) you are taxed on a lower amount  
  • your post-tax salary is then deposited into your bank account - as usual.

View and adjust your account at any time

Although we pay for your expenses on your behalf, it's still important you know what's being paid and how much is in your account at any time.

Your Secure Online Account is accessible 24/7 and allows you to: 

  • view your transactions
  • view your account balance.

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What are cap limits?

Cap limits explained

If you work in the public health or charity industry, you can package certain items up to a set amount. This is referred to as your 'cap limit'. 

The cap limit is the highest amount you can salary package within a Fringe Benefits Tax (FBT) year (1 April to 30 March) without incurring FBT.

If you salary package capped benefits over your cap limit, FBT will be applied to the expenses - and you could pay tax on the extra.

What are the cap limits for my industry?

Health employees

Health employees can salary package a range of benefits up to $9,010 each FBT year.

This amount assumes that the payments are not subject to GST. Where payments are subject to GST, this amount will be reduced to $8,172.

Charity employees

Charity employees can salary package a range of benefits up to $15,900 each FBT year.

This amount assumes that the payments are not subject to GST. Where the payments are subject to GST this amount will be reduced to $14,421.

Which benefits are capped and which are not?

Health and charity employees

Examples of capped benefits for health and charity employees include:

Examples of uncapped benefits for health and charity employees include:

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What are the benefits of salary packaging?

Why so many people say 'yes' to salary packaging

Employers offer salary packaging to reward staff for their loyalty and hard work.

But not every employer offers this benefit. So if you're one of the lucky ones, take the time to understand the many advantages salary packaging has to offer.

Pay less tax

When you salary package, you pay for some expenses - such as mortgage,rent or work-related costs - with your pre-tax salary.

So you still pay for your usual expenses, but because you're using pre-tax dollars you are reducing your taxable income at the same time. And who wouldn't want to save on tax?

Enjoy more spending money

At each pay cycle you have more money to spend on the things you want.

You may spend it on some stylish new clothes, a well-deserved weekend away - or to simply get on top of your ongoing bills. The choice is yours.

Save on the cost of running your car

By salary packaging your car with a novated lease, you could reduce the cost of keeping your car on the road - and finally afford to drive the car want.

You pay for your lease and running costs (including fuel, tyres and roadside assistance) from a combination of your pre and post-tax salary.

With a novated lease you can package:

  • a new car
  • a used car
  • your existing vehicle.

If you are considering packaging a used car or your existing vehicle, some conditions may apply.

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What does it cost?

A small fee for a potentially big saving

We manage your salary packaging account in exchange for a small administration fee.

For a standard salary packaging account, you pay just $200 a year (including GST) - a negligible amount considering how much salary packaging may save you. (Additional charges may apply for novated lease and Meal Entertainment services.)

Fees are paid out of your pre-tax dollars, and:

  • do not contribute towards any capping limit
  • do not attract FBT.

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What if I don’t work full-time?

Good news for casual and part-time workers

Salary packaging is not only for full-time employees.

If you work casual or part-time hours, and your employer offers you salary packaging as part of your workplace benefits program, you can still reap the rewards of salary packaging, No matter how many hours you work or how much you earn, if you're paying income tax, you could save by salary packaging.

And depending on your employer, you can salary package as much or as little as you like.

For example, a part-time worker in the health industry earning $20,000 a year could save up to $1,317.

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What’s the difference between capped and uncapped benefits?

Benefits may be capped or uncapped

If you work in the public health or charity industry, you will notice that benefits may be capped or uncapped - depending on the expense type and sector you work in.

Capped benefits are those that can only be salary packaged up to a certain amount. This is referred to as the 'cap limit'. 

The cap limit is the highest amount you can salary package without incurring Fringe Benefits Tax (FBT). If you salary package capped benefits over your cap limit, FBT will be applied to the expenses - and you could pay tax on the extra.

Uncapped benefits have no limit at all - and do not incur FBT.

What are the cap limits for my industry?

  • Health employees can salary package a range of benefits up to $9,010 each FBT year.
  • Charity employees can salary package a range of benefits up to $15,900 each FBT year.

Which benefits are capped and which are not?

Examples of capped benefits for health and charity employees include:

Examples of uncapped benefits for health and charity employees include:

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Can I choose the car?

Drive the car you want with a novated lease

Contrary to popular belief, you're not limited to any particular car type, model or make. In most cases, you are free to choose the car you wish to drive.

You're not restricted to just new cars with a novated lease

You can also choose to lease a used car or even your existing car.

Some conditions may apply.

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Do I drive enough kilometres to have a novated lease?

You don't have to drive a lot to benefit from a novated lease

Whether you drive fewer than 10,000 or more than 50,000 kilometres a year, a novated lease is a great way to finance a car. And you could save on tax.

Changes to legislation mean that the amount of kilometres travelled is now less important for novated lease drivers.

An example: a novated lease on low kilometres

Kelly earns $55,000 a year (excluding her employer's super contributions) and is considering leasing a new car valued at $33,606 over four years.

She estimates she will travel 15,000 kilometres a year and intends on paying for her lease and running costs with a combination of pre-tax and post-tax dollars from her salary.

By choosing to salary package her car, Kelly could increase her disposable income by $226 a month - or $2,718 a year.

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Do I earn enough to benefit from a novated lease?

You don't have to earn a high-income to benefit from a novated lease

Many people believe that only high salary earners benefit from a novated lease.

That's not true. Many employees can benefit from a novated lease.

For example, an employee with a salary of $55,000 could save $2,718 a year on a novated lease.

In fact, a novated lease can put you behind the wheel of a car you might not usually be able to afford - regardless of what you earn.

When we source a new car for you, you don't pay GST on the purchase price, which instantly increases your budget by 10%.

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How do I pay for the car’s running costs?

Let RemServ manage your running costs for you

Once your car's on the road, we manage the running costs for you. No extra hassles for you to worry about.

A simple annual budget

We establish a simple annual budget to manage your on-road costs - including petrol, servicing and maintenance, registration and insurance.

So you keep on top of your running costs with easy fortnightly payments - rather than being hit with lump sums.

Fuels cards offer even less hassle

You will also receive a fuel card to use at your choice of BP, Shell or Caltex service stations. Now that's convenient.

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How does novated leasing compare to a car loan?

Ways you could save with a novated lease

If you choose to lease a car rather than take out a regular car loan, there are a number of ways you could save.

Pay less tax

With a novated lease you could pay less tax because your car payments come out of your salary before it's taxed. With a regular car loan, you'll be making payments with your post-tax salary - and missing out on possible tax savings.

Save on GST

When you source a new car through RemServ, you don't pay GST on the purchase price. So you instantly save 10% on the cost of a new car.

Reduced running costs

With a novated lease, you could save on insurance, fuel and maintenance. We have relationships with suppliers and insurers nationwide, and can help you get competitive prices.

An example: novated lease vs car loan

Kate earns $70,000 a year and has a novated lease.  She salary packages $15,000 towards lease repayments and running costs each year using a combination of pre and post tax funds,  This includes an administration fee of $257.40.  Her taxable income has been reduced to $55,000 - so she pays only $13,209* in tax each year.  Kate is left with a take-home salary of $42,286.

Meanwhile....

Ann earns $70,000 a year and has a regular car loan.  Her total salary is taxed - so each year she pays $15,700* in tax.  Ann also spends $15,000 to keep her car on the road.  Ann is left with a take-home salary of $39,300.

As a result of novating leasing, Kate is $2,986 better off than Ann.

* Includes PAYG, Medicare and Flood Disaster Levy (where applicable)

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What happens at the end of the lease?

We'll talk you through your options

A novated lease agreement generally lasts one to five years. We will contact you before your novated lease expires to talk you through your end-of-lease options.

At the end of your lease, you may be able to:

  • keep the car: you pay the remaining amount owing on the car
  • refinance the car
  • upgrade to a new car: you will be required to trade in your current vehicle and pay any remaining amount owing
  • sell the car: you will need to pay off the remaining amount owing.

If you are considering keeping or refinancing your vehicle, some conditions may apply.

For more information:

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What happens if I change jobs during the lease term?

If you have a novated lease, it is ok to change jobs during your lease term

If this occurs, you may have a number of options available to you such as:

  • pay the amount owing and buy the vehicle outright
  • continue paying the lease and running costs yourself
  • transfer the lease to your new employer (subject to your new employer's approval).

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What if I spend more or less than I budgeted?

If you have spent MORE than budgeted …

We will contact you to discuss increasing your regular payments to ensure you can cover the higher amount.

Please also check your online statements regularly and contact us if you notice your budget is being overspent. Then we can adjust your deductions even sooner.

If you have spent LESS than you budgeted …

At the end of your lease term we will reconcile your account within 60 days.

If there is money in your account, we will send the funds to your employer. Your employer will then deduct income tax and pass the remaining balance back to you.

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What is Fringe Benefits Tax (FBT)?

FBT explained

A tax on certain employee benefits

Fringe Benefits Tax (FBT) is a tax which is applied to benefits you receive from your employer that are not in the form of cash salary or wages.

For example, a novated lease is a benefit outside your cash salary or wages - so it is subject to FBT.

The current FBT rate is 46.5%.

FBT and novated leases

For a novated lease, the amount of FBT payable depends on the cost of the car and the distance you travel each FBT year (1 April - 31 March).

Even with FBT on a novated lease, you will often pay less tax overall.

Throughout the FBT year, we will help monitor your kilometres to ensure you minimise the amount of FBT payable.

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What is the approval process for a novated lease?

RemServ offers fast and easy approval

At RemServ, getting approval for your novated lease is fast and easy.

In fact, our customers tell us that the application form is quicker to complete than most other finance application forms.

Wherever possible, we approve applications within two hours of receiving your request.

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Why should I choose a novated lease?

Choosing a novated lease is a great way to be able to drive the car you want and get all the benefits.

A better deal on the cost of your car

We purchase a large number of vehicles from dealerships across the country. Our nation-wide buying power means we get competitive prices on new cars.

Tax savings

When you finance a new car through a novated lease, you don't pay GST on the purchase price. So you save 10% instantly.Plus, when you lease a car, the repayments are made with your salary before it's taxed - reducing the amount of tax you pay later.

Convenience

We manage the administration of your novated lease, including sourcing, financing and maintaining the car. No extra hassle for you.

Budget maintenance

Your running costs are broken down into manageable monthly payments, rather than large lump sums - including big expenses like registration and insurance. This means you won't have to pay for these costs in one hit. We can also help you save on your overall running costs, such as fuel, insurance and maintenance.

Your choice of vehicle

You can choose which car you want to drive - whether it's a new, a used car, or your existing car.

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