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leski(Initiate)Initiate
30 Aug 2022

Hi Team,


Some employees enquired about whether they can salary sacrifice the HECS (additional payment only). If we put the FBT consideration on side, are we allowed to salary sacrifice the additional HECS payment from their gross wages? Any thing or any regulation prohibit us from doing this?


I've checked ATO website regarding HECS (https://www.ato.gov.au/Individuals/Study-and-training-support-loans/Voluntary-repayments/ ), it says, people can use salary packaging to pay off the HECS faster.


Really confusing. please kindly advise.


Thanks and regards,


Leski




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2,008 views
2 replies

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Most helpful reply

AriATO(Community Support)Community Support
2 Sept 2022

Hi @leski


There's no restriction on benefit types as long as the requirements of an effective arrangement are met. You can read more about this on our website.


In the scenario of salary packaging voluntary HECS loan payments, you need to be aware of fringe benefit tax implications since you the employer will be making the repayments. This type of benefit where you make payments to a third party is an expense payment fringe benefit. You can read more about this in chapter 9 of our FBT guide.

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Most helpful reply

AriATO(Community Support)Community Support
2 Sept 2022

Hi @leski


There's no restriction on benefit types as long as the requirements of an effective arrangement are met. You can read more about this on our website.


In the scenario of salary packaging voluntary HECS loan payments, you need to be aware of fringe benefit tax implications since you the employer will be making the repayments. This type of benefit where you make payments to a third party is an expense payment fringe benefit. You can read more about this in chapter 9 of our FBT guide.

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Salary Sacrifice HECS | ATO Community