Salary Packaging Guidelines
Designated officer: Manager, Financial Operations
Date reviewed: 8 May 2007
Introduction
Salary packaging involves a staff member reducing their total gross remuneration, in return for selected non-cash benefits that may be available from time-to-time.
Salary packaging is designed to provide eligible staff with a voluntary selection of packaging options. Through salary packaging it is possible for a staff member to sacrifice part of their cash salary in return for benefits such as additional contributions to superannuation or for the lease of a motor vehicle.
The University will engage the services of an external provider to advise and administer the salary packaging program. Any salary sacrificing arrangements will be a matter between the staff member and the external provider.
The University will administer salary sacrifice of pre-tax member superannuation contributions for eligible staff.
Eligibility
Salary packaging is available to all eligible full-time and fractional staff members. Staff members with appointments of 12 months or less may be limited in the benefits they can receive.
Cost of packaging
Salary packaging requires the staff member to meet the full cost of the provision of such benefits and associated taxation and administration costs. The costs to the University of providing salary packaging cannot exceed the cost to the University of providing the salary prior to entering into a salary package arrangement.
The employee may adjust their superannuation packaging arrangements once during the financial year (1/7 - 30/6) without incurring an administration cost levied by USC.
Participation in packaging
Participation in salary packaging is voluntary and the actual decision to package any element of gross salary will be a personal decision made by a staff member.
It is recommended that staff receive financial advice prior to participating in salary packaging. In accepting the opportunity to salary package, a staff member is also accepting the responsibility for any outcomes and they must make themselves fully aware of the implications of salary packaging in relation to their present and future financial situation. The University bears no liability and will not be responsible for any loss or disadvantage suffered by a staff member from their decision to salary package. The staff member undertakes to hold the University indemnified from and against all claims and actions whatsoever, whether by the staff member or on their behalf.
It is important to remember that salary packaging arrangements will continue during periods of paid leave. It is the staff member’s responsibility to immediately inform the University and the Provider of any changes in circumstances which may impact on their salary packaging arrangements.
Back to top
Salary packaging options
Superannuation: pre-tax (compulsory) contributions
The University will directly offer salary sacrifice of pre-tax (compulsory) member superannuation contributions to eligible staff.
For tax purposes, salary sacrificed contributions are regarded as employer contributions. The amount salary sacrificed in this way will be the actual staff member contribution, plus the current Contributions Tax on the employer contributions (currently 15 percent) if such is levied by UniSuper or in accordance with the Trust Deed of the Fund. The taxation and any fees will be paid by the staff member out of his/her gross salary. The staff member’s salary will be reduced by 8.25 percent (7 percent contributions and 15 percent tax payable to UniSuper on contributions paid by the employer) or 4.12 percent (3.5 percent contributions and 15 percent tax payable to UniSuper on contributions paid by the employer).
Superannuation: voluntary contributions
The University will directly offer all eligible staff members the option to sacrifice a cash component of their gross salary in order to ‘package’ remuneration benefits as voluntary salary sacrifice contributions to UniSuper, where permitted by UniSuper. For tax purposes, salary sacrificed contributions are regarded as employer contributions. The amount salary sacrificed will include any UniSuper fees and current Contributions Tax on the employer contributions (currently 15 percent) if such is levied by UniSuper or in accordance with the Trust Deed of the Fund.
Back to top
Other package options
An external provider may be able to provide:
- Payment of lease and operating costs of a motor vehicle through novated or associated lease arrangements.
- Items exempt from Fringe Benefits Tax and items concessionally taxed for Fringe Benefits Tax purposes and items otherwise tax deductible, which may include:
- Laptop/Notebook computers
- Mobile telephones and call costs
Electing to salary package
All staff must complete the Salary Package Notification Form and return to Payroll.
For the salary packaging of pre-tax voluntary contributions, staff must also complete a UniSuper Regular Voluntary Contribution Election form (available from Payroll).
For the salary packaging of benefits options (excluding Superannuation) through an external provider, staff must also contact the external provider and complete all required application/data forms.
Ceasing salary packaging
All staff must complete the Salary Package Notification Form and return the completed form to Payroll.
To cease salary packaging of benefits provided by an external Provider, a staff member must comply with the Provider’s termination requirements, including notice periods.
Back to top
Ceasing superannuation contributions
A staff member may cease packaging superannuation with one month’s notice in writing to the University. To cease packaging of pre-tax voluntary contributions, staff must also complete a UniSuper Regular Voluntary Contribution Election form (available from Payroll).
In the event of changes to legislation relating to superannuation and/or taxation that would impact on the University and/or its staff members, the University reserves the right to renegotiate or terminate the offer of Salary Packaging of superannuation contributions.
Ceasing employment and salary packaging
If a staff member who is salary packaging ceases their employment, they must advise the Provider as soon as possible but at least one month prior to the termination date. This is particularly important for motor vehicles where monthly expenditure such as fuel and running cost may vary. Any salary packaging arrangements will be reconciled at the termination date and monies owing will be offset against any salary, leave or other remuneration that may be due and payable.
Back to top