Start salary packaging at any time during the FBT year

Did you know that if your employer offers salary packaging, you can start at any point during the FBT year rather than waiting until 1 April? Even if there may be fewer pay cycles remaining before 31 March, you may still be able to salary package eligible expenses and access available benefits, depending on your circumstances and employer arrangements.

Whether you’ve recently started a new role or haven’t set up your salary packaging account yet, you may still be able to make use of some or all of your eligible cap during the current FBT year.

It’s also worth remembering that salary packaging doesn’t have to be an all-or-nothing decision. You can choose an amount to salary package that works for you, up to your eligible limit.

Can you start salary packaging part-way through the FBT year?

Yes. Eligible employees can start salary packaging at any point during the FBT year. 

Salary packaging lets you use before-tax income to pay for approved expenses. Depending on your circumstances, this could reduce the amount of income tax you pay.

While many employees begin their arrangements at the start of the FBT year, waiting until 1 April is not a requirement.

Understanding salary packaging caps across the FBT year

If you’re eligible to salary package up to $9,010 as an eligible healthcare employee, or up to $15,900 as a not-for-profit employee, these caps are typically spread across the FBT year.

For employees paid fortnightly, this usually means dividing the available cap across 26 pay cycles.

Example: Fortnightly salary packaging amounts

Spreading your salary packaging cap across the FBT year can provide a consistent deduction from each pay while helping you make the most of the benefits available to you.

What happens if you begin salary packaging later in the year?

If you start salary packaging part-way through the FBT year, you may still be able to use some or all of your available cap before 31 March by spreading it across the remaining pay cycles.

The amount you choose to salary package from each pay may be higher than if you had started earlier in the year, as there are fewer pay cycles available before the end of the current FBT year.

Example: Using your available cap over 13 remaining pays

*The amount you nominate will depend on your individual circumstances, available cap and employer arrangements.

If you’re employed as a long-term casual employee, you may also be able to nominate a percentage of your pay to salary package, subject to your employer’s eligibility requirements and salary packaging arrangements.

Things to consider before waiting for the next FBT year

Starting salary packaging before 31 March may provide greater flexibility in how your available cap is allocated across the remaining pay cycles for the current FBT year.

Depending on when your salary packaging starts, you may still be able to use some or all of your available cap and access any potential tax savings sooner. 

Even if you don’t intend to use your full cap, you can choose an amount that suits your circumstances up to your eligible limit.