5 steps to maximise your salary packaging cap before March 31
While most personal income tax stuff tends to happen in the receipt-filing rush for June 30, remember: your Salary Packaging card benefits reset on March 31.
That means you only have a pay cycle or two to really maximise the benefits offered through salary packaging before your new amounts kick in.
We’ve put together five ways to boost your salary packaging benefits. The information below will, of course, depend on your situation, income and your employer permissions. If you want to discuss your specific Salary Packaging arrangement, please get in touch with Easi.
1. Know how much you can claim with Salary Packaging
Let’s say you work for a not-for-profit or other FBT exempt employer. You’ll likely have a maximum entitlement for meal/entertainment/holiday accommodation of $2,650.
Check your remaining entitlements and book the babysitter, you’ll want to spend and claim the money on your salary packaging and meal entertainment cards before you look like an April Fool.
There’s also a $9,010 cap which needs to be paid before 31 March.
Caps apply to cards, so anything not used before the deadline means the tax saving is lost.
2. Make sure you’ve logged all relevant expenses
Many Salary Packaging providers wait for your claims before making payment, so if you haven’t yet claimed or submitted your proof of expenses, you may not receive the maximum benefit to which you are entitled.
3. Ensure your tax affairs are in order
If you’ve failed to lodge last financial year’s tax return by now, it may cause headaches when claiming the most from your salary packaging card. In order to claim the maximum amount for salary packaging, you’ll first need to make sure that your personal tax affairs are in order.
However, if your paperwork is all in order, the ATO allows you to maximise your card right up ‘til 31 March.
4. Don’t leave it to the last minute
Your transactions may take a few days to process depending on the merchants and the number of financial institutions the funds need to clear through. It is highly suggested that you clear your account balance well before 31 March and don’t leave your spending to the last minute.
5. Switch salary packaging providers (or use more than one!)
Even if you have a dedicated ‘office approved’ Salary Packaging Card provider, there’s a good chance you can Salary Package a car with another provider. That includes your current car (under 10 years old) or a new car.
Also known as a Novated Lease, this compounds your salary’s power, because you won’t be forced to deplete your Salary Packaging Card benefits on car costs like fuel.
Thinking of hanging salary packaging providers? Employers (and their accountants) often prefer a changeover date of 1 April; the start of the new salary packaging (FBT) year.
For more information on the benefits of Salary Packaging, speak to one of our staff to see how we can help you!