Me again! Another question relating to salary packaging for staff at an FBT-exempt PBI. This relates to the timing of incurring eligible expenses and salary packaging deductions. For the purposes of this question, let's assume an Effective SSA is in place.
My understanding from TR2001/10 - and gleaned from other information that's publicly available, and then a (brief) conversation with our advisors - is that to salary package against the $15,899 living expenses benefit and the $2,650 meal entertainment & holiday accommodation (ME&HA) expenses benefit, the employee must first have incurred an eligible expense.
For example, I eat out and the bill is $200. I make a claim for $200 and $200 is salary package against my pre-tax income as part of the maximum $2,650 ME&HA benefit I'm entitled to.
However, if my employer was to (say) deducted $106 dollars a fortnight over (say) 25 fortnights of the FBT year from my pre-tax income (purportedly against the ME&HA benefit) and I then used that money to pay for a $200 restaurant meal at some later date, that would be salary or wages (against which withholding tax should have been held).
Have I got the right end of the stick? If anyone has a different view I'd love to hear it and I'll go back to our advisor for further clarification.
The next thing I'm struggling with is whether the expense has to be incurred before the employee does the work that will give rise to the entitlement to be paid (and against which pay the expense will be packaged).
To use the previous example, I spend $200 on a restaurant meal on a Saturday night, which is the day before the end of a work fortnight. I make a claim. Can that amount be salary packaged against my pre-tax income for the fortnight just ending (and for which I will be paid on Tuesday)? Or does it need to come out of the following fortnight's pay?
Thanks, in advance, for the help...
Cheers
Cate
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