Salary Packaging for Casual Employees – FAQs

By Ben Markovic

At GO Salary, we are often asked about salary packaging for casual employees. Throughout the social sector, many staff work on a casual basis, and they are often unsure where they stand when it comes to salary packaging and other benefits.

Do you hire casuals at your organisation? Or perhaps you are working on a casual basis yourself? Either way, we think the below FAQs are worth checking out!

Can Casuals Salary Package?

The answer to this question isn’t so straightfward. It depends on the employer. Some employers offer salary packaging to casual employees as part of their overall salary packaging policy. Others make it available for permanent staff only. There can be many reasons for employers to decide one way or the other. As salary packaging is an employer provided benefit, the organisation can choose who it is offered to.

If you’re a casual employee and want to find out if salary packaging is offered to you, the best place to start is your HR team. They will be able to confirm eligibility. If your organisation salary packages with GO Salary, you can check directly with us.

How Much Can Casuals Salary Package?

If salary packaging is available to casuals of FBT exempt organisations, they are able to uitlise the same limits as permanent staff members. There is the $15,900 ($30,000 grossed-up) limit for household expenses such as rent payments, loan repayments, credit card repayments, school fees and more. Plus the additional $2,650 ($5,000 grossed-up) limit for meal entertainment and holiday accommodation expenses. Other benefits might also be available, depending on the employer’s policy.

How Does it Work With Fluctuating Earnings?

Depending on the staff member, earnings can fluctuate a fair bit from pay-to-pay. Some casual employees work regular hours whereas others work sporadically, meaning there might be pays where they don’t earn anything at all. If Payroll is entering a set salary packaging deduction, such as $611 per pay, this might no go through every fortnight. The treatment of these ‘failed’ deductions varies across different payroll software systems. In some instances, a deduction of $0 will be applied when the entire $611 can’t be taken, whereas with others it will require manual intervention from Payroll.

We have seen configurations where the employee’s deduction goes through at a lower amount if they don’t earn enough in a given pay.

salary packaging for casuals

Do You Have an Example of the Above Scenarios?

Sure! Let’s say Amy Citizen works casually and has a pre-tax salary packaging deduction of $611 set up in the payroll system. Amy is paid fortnightly. When Amy earns more than $611 in a pay, the deduction can come out. But what if Amy only earns $200 in a pay? Depending on the payroll system, one of the three below scenarios will typically occur:

  • 1. Since $611 can’t be deducted from $200, the payroll system will produce an exception and the Payroll team will need to manually intervene and update the figures.
  • 2. Since $611 can’t be deducted from $200, the payroll system will deduct $0. All of Amy’s earnings in that pay will be subject to tax.
  • 3. The payroll system will deduct up to $611. So the entire $200 will come out as a pre-tax salary packaging deduction.

Certain configurations can often be made in order to save the Payroll team time.

Can Casuals Salary Package 100% of Their Earnings?

Setting up a deduction based on a percentage of earning is possible in many payroll systems. This is a popular option for casual staff members, especially when they’re unusure of how often they’ll be working! In most cases, the deduction is set up for 100% of the employee’s earnings.

This means that everything the employee earns will be deducted pre-tax as salary packaging. It is therefore important to monitor how each person is tracking against the salary packaging thresholds. GO Salary clients don’t have to worry about tracking, as our system will monitor the threshold for you.

Can Casuals Salary Package at Multiple Employers?

Yes! As long as the employers are separate organisations. This gives the employee access to the $15,900 and $2,650 limits at both employers. The employee should ensure they have enough substantiation to cover the salary packaging benefits being received at both organisations.

Any Further Questions?

We’re happy to help. The GO Salary system is designed to manage a range of scenarios and requirements. We have extensive experience in this area and are happy to share some of the service features we’ve designed to assist casual employees and Payroll teams. Please contact us.