Hi there,
I work for a not for profit and I’m trying to understand salary packaging. I understand that it’s taken out of your pre taxed salary and that it’s reportable on a tax return. I also understand it could mean a Medicare levy surcharge and more in HECS repayments.
My question is about tax return. So:
Say I earn 90K and the PAYG withheld is 21K plus 5K for HECS. When I fill out the form, my gross salary would be 90K and the total tax withheld would be 26K.
If I salary package, it would be reportable of 30K FBT. But my gross salary wouldn’t change because it would still be 90K. What would change is that the tax withheld would be less because there’s less taxable income. So wouldn’t that mean I’d just end up owing tax or getting less back in a tax refund?
Maybe I have it all wrong and I’m hoping someone can explain it to me.
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