Can an employee of an FBT-exempt charity salary sacrifice to a credit card?

 Author: JayATO(Community Support)Community Support

11 Mar 2026

Hi @JeremyRose,

Salary sacrificing to pay a personal credit card isn't a standard arrangement. Generally, any type of benefit can be included in a salary sacrifice arrangement, but the benefit must form part of the employee's remuneration and replace what they would otherwise receive as salary.

If you do set up this type of arrangement, there are important implications to consider. The payment to the employee's personal credit card would likely be treated as a fringe benefit, which means you may have to pay fringe benefits tax (FBT) on the value of this benefit – even though you're FBT-exempt as a registered charity. This is because FBT exemptions for charities don't cover all types of benefits.

For an arrangement to be effective, it must be entered into before the work is performed, documented in writing between you and your employee, and the employee can't have access to the sacrificed salary amount.

We recommend checking whether your FBT exemption applies to this specific type of benefit arrangement. You may need to seek professional advice to understand the tax implications for both your organisation and the employee, particularly around whether this arrangement would attract FBT and how it should be reported.

Reply0 likes

• Report as inappropriate