I work for a PBI with with Fringe Benefit Tax - exempt status. I receive a $14,000 motor vehicle allowance per year. Can I salary package this so that I reduce my tax on it? If so, I assume the employer shouldn't report this under allowance, and instead report it under reportable fringe benefits?
Thanks.
Hiya @sanctuarysteph ๐
An effective salary sacrifice arrangement is where you permanently forego part of your salary and wages in exchange for other benefits. Those other benefits may be for superannuation or other benefits. If it's other benefits, then what or who does your employer pay that sacrificed amount for or to?
For example, is your employer paying those amounts to a third party for a novated lease or to a third party for benefits that they provide to you? Those benefits may be a fringe benefit.
However, if the employer pays you the additional money so you can claim a deduction in your tax return, then that's not a sacrifice for another benefit.
What may be relevant is for you to apply to the ATO for a Downwards Variation specifically for your motor vehicle allowance for the deduction you may make at tax return time. See the first example in that ATO link I provided above and you will see your exact scenario covered ๐
Deanne
Hiya @sanctuarysteph ๐
An effective salary sacrifice arrangement is where you permanently forego part of your salary and wages in exchange for other benefits. Those other benefits may be for superannuation or other benefits. If it's other benefits, then what or who does your employer pay that sacrificed amount for or to?
For example, is your employer paying those amounts to a third party for a novated lease or to a third party for benefits that they provide to you? Those benefits may be a fringe benefit.
However, if the employer pays you the additional money so you can claim a deduction in your tax return, then that's not a sacrifice for another benefit.
What may be relevant is for you to apply to the ATO for a Downwards Variation specifically for your motor vehicle allowance for the deduction you may make at tax return time. See the first example in that ATO link I provided above and you will see your exact scenario covered ๐
Deanne
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