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Employer only passes on half the Salary Sacrifice to me.

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My employer only does salary sacrifice by splitting the Tax saving in half:

 

Extract of the contract:

"Tax savings generated by the Salary Sacrificing Scheme will be split equally between Xxxxx Xxxxxxxx and the employee. Maximum amount of Xxxxx share of savings is no more than $500 per fortnight."

 

Is this legal in any way? I thought I am paying Tax and any savings are mine, why does my employer can get half of MY saving?

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Dynamo

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Hi @SMARTbyte and thanks for your post!

 

When entering into Salary Sacrificing arrangements, the employer may fix the terms of the contract. As you have provided the extract, the contract is clearly in writing.

 

Depending on the other terms in your contract, employees can renegotiate a salary sacrifice arrangement at any time, and generally you can renegotiate amounts of salary or wages to be sacrificed during contract renewal periods.

 

For more information about salary packaging click here.

 

Whether this salary sacrifice scheme is legal is not something we can answer. It would be best for you to contact the Fair Work Commission and discuss your legal query with them. They will be able to provide you with advice on this issue.

 

All the best!

2 REPLIES 2
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Most helpful response

Dynamo

Replies 0

Hi @SMARTbyte and thanks for your post!

 

When entering into Salary Sacrificing arrangements, the employer may fix the terms of the contract. As you have provided the extract, the contract is clearly in writing.

 

Depending on the other terms in your contract, employees can renegotiate a salary sacrifice arrangement at any time, and generally you can renegotiate amounts of salary or wages to be sacrificed during contract renewal periods.

 

For more information about salary packaging click here.

 

Whether this salary sacrifice scheme is legal is not something we can answer. It would be best for you to contact the Fair Work Commission and discuss your legal query with them. They will be able to provide you with advice on this issue.

 

All the best!

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Devotee

Replies 0

Keep in mind that your employer will be incurring additional costs for maintaining your salary sacrifice arrangement (e.g. cost of fringe benefits tax return). Personally I think it's fair that the cost of this is burdened by the employee, but I can't comment as to what that amount should be or whether half is fair.