We’re getting towards that time of the year again! Although GO Salary will be offering our popular tax time fact sheet again this year, we’re always here to answer your questions. We’ve noticed a few recurring ones and thought it would be handy to bundle our answers together in one convenient place. Read on for your top five most frequently asked tax time questions.
I’m salary packaging for the first time and have a ‘Reportable Fringe Benefits Amount’ on my Income Statement. What does this mean?
Salary packaging payments for our members are capped at $15,900 per year (or $9,010 per year for hospitals). You’re not required to pay tax on this money, but it is included on your Income Statement for reporting purposes. You’ll see it listed as ‘Reportable Fringe Benefits Amount’.
The reported figure is a ‘grossed-up’ amount. For example, if you salary package $15,900, it becomes ‘grossed-up’ to a reportable (gross salary equivalent) figure of $30,000. This is an ATO requirement.
Curious to know more about how grossing-up works and its impact on things like HELP/HECS, Centrelink and child support? Click here for more details.
If I salary package, can I still claim other expenses as a tax deduction when doing my tax return?
Yes! Remember that salary packaging is utilised for household expenses which cannot normally be claimed as a tax deduction. For example, as a member of GO Salary, you can salary package your payments for rent, mortgage, school fees, car loans and more. These are your personal household expenses which would not qualify as tax deductible. This means that you can use these personal expenses in your salary package, and keep your work-related expenses separate for your claims when doing your tax return.
As always, consult with your accountant to find out about options relating to your personal circumstances.
I’ve started salary packaging, yet there is no ‘reportable fringe benefits amount’ on my Income Statement. Why?
The most common reason is simply down to timing. The salary packaging period (FBT year) runs from 1 April to 31 March, but the income tax year runs from 1 July – 30 June. This means that if you started salary packaging after 31 March of the current calendar year, the reportable fringe benefits amount won’t appear on this year’s Income Statement. Here’s an example.
- Judy starts a new job on 1 May, 2023. Judy starts to salary package from the first pay in May.
- In July 2023, Judy receives her income statement from her employer. This shows her earnings (salary) from 1 May 2023 – 30 June 2023.
- Even though Judy has been salary packaging in May and June, there is nothing shown in the reportable fringe benefits section of the Income Statement.
- This is because the reporting year for salary packaging (fringe benefits) had ended on 31 March. This was before Judy started salary packaging on 1 May.
- Judy’s salary packaging for the period 1 May – 30 June will be shown on the following year’s income statement (which will be produced in July 2024).
Remember that you can always check when you started salary packaging by viewing your detailed transaction statement through your online GO Salary portal.
Do I need anything from GO Salary before doing my tax?
This is a quick and easy one. The answer is no. Your employer will provide everything you need on your Income Statement. GO Salary provides the reporting directly to your employer, so you don’t need anything from us.
I’ve got a new job. Should I wait until the new income tax year before salary packaging?
There’s no need to. You can start salary packaging straight away. As mentioned above, the salary packaging year runs from 1 April – 31 March, which is a different reporting period to the income tax year. This means that, depending on when you start, there is an opportunity to use the remainder of the year to salary package the annual limit.
Please keep the year in mind when commencing a new job. By starting your salary package as soon as you join your new employer, you can utilise the maximum benefit in the remaining pays in that year. When designing your salary package online, our system will automatically calculate the amounts based on the number of pays available.
Want to Learn More?
We’ve got you covered. To help you easily navigate this tax season, you can access a variety of GO Salary fact sheets online. Keep an eye out for our updated ‘tax time’ information which we’ll be releasing in the coming weeks, too. As a reminder, while we can provide you with general information, GO Salary cannot provide financial advice. Please discuss your personal situation with your trusted accountant or advisor.
If you have questions for GO Salary, please get in touch!