A salary packaging opportunity has arisen for individuals earning over $180,000 due to the newly announced tax measures in the 2014 Federal Budget.
From 1 July 2014, individuals with taxable income over $180,000 will be subject to the 2% Deficit Repair Levy. However, due to the lag in the FBT year, the equalising 2% increase of FBT will not occur until the later date of 1 April 2015.
This 9 month delay provides a 2c tax benefit for every dollar the individual’s diverts from their salary and converts into a fringe benefit paid by their employer. This is easiest achieved by entering into a salary packaging arrangement for the employer to pay the individual’s personal expenses directly.
The types of expenses that are suitable to this arrangement are those that would not otherwise be deductible for the individual. Common examples include home mortgage and family motor vehicle repayments.
It is noted at the time of writing the Deficit Repair Levy has not yet been passed through parliament.
Should you wish to further discuss any salary packaging opportunities, please do not hesitate to contact our office.
CABEL Partners is a boutique Chartered Accounting firm offering accounting and audit services to small to medium enterprises, individuals and not for profit organisations. We specialise in specialist tax advice and start up business mentoring. CABEL Partners knows what you want! CABEL Partners will provide certainty and complete your work with clear and regular communication, transparency, and a pro-active attitude.
Email - firstname.lastname@example.org Office: 02 807 10 300 A: Level 5, 1 James Place, North Sydney 2060