Salary Packaging and Tax

[Albertzshot]

Hi everyone,

Can anyone advise if there is a % limit of the amount of your basic salary which can be "packaged"?

I currently use the scheme for LAFHA and currently exceed 50%. Would this be an issue for the ATO? If so I think I best place LAFHA on hold until the end of the tax year.

Thanks in advance

[Parley]

There is a limit for concessional contributions which includes the employer contribution as well as salary sacrificed employee contributions.

If you are under 50 the limit is $25000 per year

If you are over 50 the limit is $50000 per year.

 

The tax payable is significant if you go over these amounts.

[Albertzshot]

Thanks for the reply Parleycross.

 

So being under 50, I'm entitled to package only upto $25k? Regardless of my basic salary ?

 

Have you seen any decent ATO Guidelines on this, I have had little success finding any docs re Salary packaging or LAFHA

[Parley]

Correct.

http://www.ato.gov.au/super/content.aspx?menuid=0&doc=/content/60489.htm&page=3&H3

 

If you go over you will be slugged with an additional 31.5% tax on the contributions on top of the normal 15% contributions tax.

[Parley]

Just in case I misled you, the cap is only for your salary sacrifices and employer contribution to Superannuation.

 

Other packaged items are a separate issue, you can still package a car or whatever if your employee allows you to.

 

Just make sure you don't go over the $25K a year going to Super

[roflie]

I only wish i knew what this all meant - I've read its worth hiring a tax accountant for these sorts of things as they often make you more many back than their annual fee?