If you have been provided the surmount money management app by your accountant, financial adviser or employer then we will be able to identify areas that you may be able to salary package and approximate benefits of engaging with your work salary packaging program.
Salary packaging is an exciting component of the Australian tax landscape, but it can also appear to be quite complicated. The Australian tax system works simply: – you go to work and get paid as a reward for your effort. Before you actually receive any cash your employer takes out income tax. The tax amount is sent to the Australian tax office and the balance is what you have to live on until next payday.
Salary packaging simply looks at paying certain expenses before the tax is taken out. Your salary stays the same but this timing difference could lower your tax burden.
The process is simple
- you earn your income
you pay tax
- the balance ends up in your pocket
- you spend the balance in your living expenses
you earn your income
salary packaging allows you to pay bills before tax dollars
you pay tax on what’s left after packaging
imagine reducing the amount of tax simply because your employer can pay certain bills on your behalf
At 30% you pay $300 tax on every $1000 that you earn.
Consider these advantages
1. reduce your taxable income
depending on the industry and sector you work in you could be eligible to pay for a range of expenses with your pre-tax salary
2. Increase your disposable income
if you earn the same amount, pay less tax then you could end up with more disposable income
3. choose how to spend or save your tax savings
our first recommendation would be to go to your money management App and look at what is your budget priority.
- extra superannuation
- credit card repayments
- put it against the home loan
- save up for that holiday
- You decide!