Despite significant changes to personal income tax rates in Australia, salary packaging opportunities are alive and well. Even if employees are earning less than $150,000 per year, opportunities exist to improve their after tax income.

Employees who have the flexibility to salary package components of their salary can still dramatically improve their after tax salary by using some common salary packaging strategies. Common techniques include salary packaging superannuation, benefits exempt from fringe benefits tax, as well as investigating opportunities to package concessionally taxed fringe benefits such as motor cars.

Rob Giffard, a GiffardSim Accountants tax advisor, said that, "employees with the opportunity to salary package should be seeking advice about the mix of benefits for packaging as well as the impact it may have on benefits such as family tax benefit and HELP/HECS repayments. This issue is particularly relevant to defence force personnel, employees of public hospitals such as doctors and nurses, as well as other organisations offering salary packaging to employees."

Several traps exist that can cost the employer, or the employee, significant amounts if the package is not structured properly. Also, caution is advised when employees or employers are considering some salary packaging opportunities as the ATO may not take the same view as employees or employees offering the benefit.

Employees or employers looking at salary packaging should seek advice from GiffardSim Accountants to ensure they are fully informed of the process, benefits, and potential disadvantages.

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