Unless a council resolves to make themselves PAYG employees, they are not considered employees of the Council. Councillor allowances are considered ordinary earnings. Can Councillors salary sacrifice their pre-tax income, if they are not considered employees of the council? For example, novated leases, education fees, etc.
Hi AthinaPB, councillors have been able to 'fee sacrifice' superannuation since 2007 despite them not being employees. See ATO ID 2007/205. However they can't sacrifice a novated lease because this would amount to alienation of income i.e. don't pay me, pay the leasing company. Very few councils have resolved to make councillors employees and bring councillors into the PAYG net under s446-1 of Sch 1 to the Tax Admin Act as council will pay FBT on benefits provided, in NSW mostly the mayor's car. City of Newcastle did make that resolution earlier this year.
Hi @AthinaPB
A salary sacrifice agreement is between an employer and employee. What we look at is that its an effective arrangement. Are the councillors contractors, how does that work? It'll be up to their "employers" to offer salary sacrifice.
Thanks for your reply, @AriATO.
Councillors are elected to office, like other politicians, they are not contractors. However, unlike other politicians, they are not considered employees of the Council, whereas other politicians are considered employees of the state, territory or Commonwealth.
We are paid allowances, not salaries. We are not subject to PAYGW but the allowances are considered ordinary earnings.
I want to know whether I can sacrifice part of my allowance for a novated lease.
Thanks.
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