Salary Packaging. Employee Information Booklet

Transcription

1 For more copies please Salary Packaging Employee Information Booklet Managed by Visit today And view your salary package As at July 2009 FOR FAST, FRIENDLY SERVICE, CONTACT ADVANTAGE ON

2 TABLE OF CONTENTS Advantage Salary Packaging It is recommended you read the entire booklet. The information is important and easy to read. Each employee is responsible for their own financial and taxation implications of salary packaging. The information booklet will assist greatly. 1. Introduction How Does Salary Packaging Work?...2 What Happens Pay Day?...2 Tax Return - What Happens? Commonly Asked Questions about Salary Packaging...3 How Do I Get Started?...3 How Much Tax do I Save?...3 What are Fringe Benefits?...3 Is Fringe Benefits Tax ( FBT ) Payable?...4 What If I Have Personal Use of an Employer Provided Car?...4 What is the $30,000 grossed-up value? What Expenses can I Salary Packaging?...5 Group 1 - Expenses - no GST - max. $16,050 per year if all expenses form Group Group 2 - Expenses include GST Top up Group 1 expense with Group Group 3 - Exempt Fringe Benefits no limits Substantiation Please read carefully Deductions from Your Pay Methods of Payment / Reimbursement Direct payment Automatic reimbursement Reports Information for your Payment Summary (was the Group Certifcate)... 9 How does the Payment summary reporting affect me?...9 Does salary packaging affect the Superannuation Contribution paid by E.W Tipping Foundation? How Do I Change My Salary Package?...11 Leave without Pay (LWOP)...11 How to Cease Salary Packaging Twelve Month Review Action Required Administration Cost A Fair System How to Start Salary Packaging General Salary Packaging Enquires...13 Disclaimer: Advantage Salary Packaging ( Advantage ) and E.W Tipping Foundation are not responsible for any loss or damage which may arise from any person acting or relying on any statements contained in this publication or for any information given by any remuneration consultant. This information booklet provides general information on salary packaging only and should not be relied upon as financial advice. This publication has not been prepared with any particular investment objectives, financial situation and needs of individual employees. In all cases, employees should conduct their own investigation and analysis of the information contained in this publication. No employee should act on the basis of any matter contained in this publication without taking appropriate legal, financial and other professional advice upon their own particular circumstances. The information contained in this publication is based on Taxation Legislation as at July Advantage Salary Packaging.

3 1. Introduction What is Salary Packaging? The taxation laws provide significant tax concessions for not-for-profit organisations, including E.W Tipping Foundation. One such concession is an exemption from Fringe Benefits Tax (FBT). This means that E.W Tipping Foundation can pay/reimburse an employee s personal expenses without any tax (up to $16,050 per year tax free). This amount is in addition to your normal taxfree threshold for salary ($6,000 p.a.). When you salary package, money is deducted off the top of your salary (i.e. the deduction is made pre-tax ). You only pay tax on the remaining portion of your salary, not the salary packaged money. See the example next page. As a result, the tax you pay each fortnight is significantly reduced. The tax saved is a permanent tax saving. You are never taxed on the salary packaging money. This is the tax law. The Tax Office sets a limit on how much you can salary package. The salary packaging limit is set at a generous $16,050 per fringe benefits tax year. The fringe benefit year is 1 April to 31 March. The administrator will ensure your salary package amount is within the Tax Office limit. The Administrator E.W Tipping Foundation has appointed Advantage Salary Packaging ( Advantage ) to manage the salary packaging program. Advantage will manage all aspects of the program, including payments. You will find that Advantage offers a professional and friendly service contact details are at the end of the booklet. Privacy Your Information is Secure All information provided to Advantage is treated with the strictest confidence. Your information is securely retained by us and is not made available to any person (other than your employer for taxation reporting purposes). Personal information will be available over the phone once we undertake an identity check of the caller. For security purposes, all changes to salary packages (including bank accounts) must be in writing ( , fax, letter or via You May Get Independent Advice E.W Tipping Foundation recommends that employees consider independent financial advice to ensure that their salary package meets their personal and financial requirements. A representative from Advantage will be available on site from time to time or by phone ( ) to provide general assistance. Advantage are experts in salary packaging, but are not registered financial planners. A financial adviser directory is available from the Financial Planning Association website It is the employee s responsibility to ensure salary packaging is consistent with their tax and financial objectives. E.W Tipping Foundation Salary Packaging 1

4 2. How Does Salary Packaging Work? Judy earns $30,472 per year. She has a fortnightly mortgage payment of $400 and fortnightly school fees of $100. She also has health insurance payments of $300 per month. Judy may salary package all these items and wants to salary package the maximum of $16,050 per year. Judy s annual expenses look like this: Advantage will: Mortgage $ 400 x 26 = $10,400 fully reimburse or pay direct School Fees $ 100 x 26 = $ 2,600 fully reimburse Health Insurance $ 300 x 12 = $ 3,600 part reimburse Total expenses $16,600 To salary package the maximum amount, Judy needs to show evidence that she has at least $16,050 in expenses annually. Judy s expenses easily exceed this amount. Remember, Judy pays all these expenses herself, and provides evidence to Advantage (i.e. a photocopy) that these expenses exist. The salary packaging money is a reimbursement of expenses and is paid into Judy s bank account as part of her normal pay. To get started, Advantage will total the value of expenses provided by Judy (up to a max. of $16,050), calculate the fortnightly value of the expenses (e.g. $16,050 / 26 pays = $617.29), and this is the amount Judy salary packages. Let s see what happens pay day. What Happens on Pay Day? Before After Wages (gross) $1,172 Wages (gross) $ 1,172 unchanged Less: Salary Package (617.29) ($16,050/26) pre tax Admin Fee ( 8.50) pre tax Wages taxed $1,172 Wages - taxed $ Tax ($ Tax ($ 3.59) Wages (net) $ 1, Wages (net) $ Paid Payroll Salary Package $ Paid Advantage Total take home $ 1, Total $1, extra pay is $95.48 As a result of salary packaging, Judy will now receive two payments each fortnight. The salary packaging money is paid into a bank account nominated by Judy (normally savings account). Once the two payments are added, this is Judy s new take-home pay (up $95.48 a fortnight). Tax Return What Happens? At tax time Judy is no longer taxed on $1,172 per fortnight ($30,472 per year), but is taxed on only the amount after salary packaging, that is $ a fortnight ($14, per year). Judy s Payment Summary (was Group Certificate ) now shows her salary as only $14, Hence, Judy is never taxed on the salary packaging money. Judy is delighted. E.W Tipping Foundation Salary Packaging 2

5 3. Commonly Asked Questions about Salary Packaging Who is Eligible to Salary Package? At E.W Tipping Foundation salary packaging is available to all full time, part time, casuals and contract employees. How Do I Get Started? Before salary packaging may commence, employees must complete 3 forms: An Application Form; Salary Packaging Agreement (end of the booklet); and Expense Type and Bank Account form (attach copies of the expenses listed). These forms are included at the end of the booklet. Send the completed forms, together with your copies of expenses to Advantage. Contact details on forms / end of booklet. Once your application is processed, a letter of confirmation and a report is ed or sent to your home address. Your report will show the start date and the amount of your salary package. Please check all information carefully, especially your bank account details. Your money will be paid exactly as shown on the report. Contact Advantage immediately if any changes are required. It is the employee s responsibility to ensure the report is correct. How Much Tax do I Save? In our case study, Judy saves $95.48 tax per fortnight. Everybody should save some tax as a result of salary packaging, but how much each employee saves depends on 1). How much you earn and 2). How much you salary package. Tax savings based on $16,050 are: Annual Saving Tax Saving Salary per year per fortnight $20,000 $ 832 $ 32 $25,000 $1,664 $ 64 $30,000 $2,470 $ 95 $35,000 $2,678 $103 $40,000 $3,614 $139 Other potential implications of salary packaging are discussed in Section 9 on page 9. Please read carefully. Contact Advantage if you need assistance. What are Fringe Benefits? Fringe benefits is the legal term used by the Australian Taxation Office (ATO) to describe payments made through salary packaging. A fringe benefit is a reimbursement of an employee s personal expenses (e.g. mortgage, rent, rates, loans, school fees, credit cards). A list of suggested fringe benefits (expenses) to salary package is on page 5 (over). In our case study, Judy has her mortgage, health insurance and school fees reimbursed through salary packaging. The amount reimbursed is called a fringe benefit. Fringe benefits are NOT subject to income tax in the employee s hands under the tax laws. E.W Tipping Foundation Salary Packaging 3

6 Is Fringe Benefits Tax (FBT) Payable? No. E.W Tipping Foundation is exempt from paying FBT as it is classed as a charity for tax purposes. However, there is a limit to the exemption. Salary packaging payments cannot exceed $16,050 p.a. (a grossed-up value of $30,000 see below). The limit includes the value of an employer provided car for personal use (e.g. home to work travel). See below if you have a company car. Given full information, Advantage will ensure your salary packaging does not exceed the salary packaging limit and no FBT is paid. What If I Have Private Use of an Employer Provided Car? Some employees may have private use of an employer provided vehicle. Private use of a car for tax purposes is where the employee takes the car home (i.e. home to work travel). This is the case regardless of why you are taking the car home (e.g. home garaging for security). If you have private use of a car, you must indicate this fact on your Application Form or contact Advantage and advise us of this information. Your salary package may need to be adjusted to ensure the salary package limit is not exceeded. What is the $30,000 grossed-up value? = Reportable Fringe Benefits You can salary package up to $16,050 worth of family expenses per year. For tax purposes, the $16,050 is like a net or after-tax figure (as you keep 100% of this money). As the Tax Office always requires you to report your gross income each year, it is necessary to gross-up your salary package amount. That is, what is $16,050 cash worth to you in gross salary terms? This figure is calculated using a Tax Office formula. The grossed-up value of your salary package is reported on your Payment Summary (was Group Certificate). The amount is calculated as follows: Value of expenses paid or reimbursed x e.g. the grossed-up figure for Judy is $16,050 x = $30,000 The amount shown on your Payment Summary is the grossed-up figure. It will appear on your Payment Summary and is called Reportable Fringe Benefits Amount. You must copy this figure exactly as written into your Tax Return. This figure is very important for Centrelink, HELP and other income tested benefits. Refer section 9. Remember, there is NO income tax on your salary packaging (reportable fringe benefits). People sometimes jump to this incorrect conclusion. Reportable fringe benefits will be taken into account in determining your HELP, child support; Medicare levy surcharge and Family Tax Benefit entitlements if applicable. It is strongly recommended that you refer to section 9 on page 9 for a detailed explanation. If you are in any doubt, please contact Advantage for assistance. We are here to help. E.W Tipping Foundation Salary Packaging 4

7 4. What Expenses can I Salary Package? The list of suggested expenses is below. The expenses may be in the employee s name, your partner s name or joint names. It does not matter any family expense is OK. It also does not matter who pays the expense. The list of expenses below is split into three categories. Why? The tax implications differ depending on the type of expense you salary package. Group 1 expenses do not include GST. These are the best expenses, as you can salary package a maximum of $16,050 if all your expenses are chosen from Group 1. Hence, these expenses are highly recommended, as well as the Salary Packaging Card. Group 2 expenses have GST included. As a result, there are slightly different tax implications (Advantage will calculate this difference). From an employee s point of view, it is better to do Group 1 expenses before Group 2. So, once you have listed all your Group 1 expenses on the Expense Type form, if you are still short of the salary packaging limit, consider the salary packaging card. Otherwise, list as many Group 2 expenses up to the salary packaging limit. Group 1 Expenses - no GST max. $16,050 per year if all expenses from Group 1 Home mortgage repayments (not rental properties) Personal loan or car loan repayments Rent Private health insurance (e.g. Medicare, HBA, MBF etc.) Educational fees (e.g. schools fees, prior year HELP/HECS payments) Rates (council rates and water) Credit Card payments (not your balance or credit limit) amount PAID Medical and dental expenses (net of any rebate / claim) Salary Packaging Card (a Visa card, issued by ANZ Bank. Details end of booklet) - NEW Group 2 Expenses include GST Top up Group 1 expenses with Group 2 (Groceries may only be salary packaged using a credit card or the Salary Packaging Card) Telephone, electricity or gas expenses (utilities) Car Expenses (e.g. servicing, repairs, maintenance, rego., CTP not petrol ) House repairs or maintenance (e.g. electrical, plumbing) Car or Home & Contents Insurance (e.g. NRMA, AAMI, RACV) Domestic travel and accommodation (e.g. airfares) Group 3 Exempt Fringe Benefits Some items are not subject to the limit. Therefore, you can salary package the following items in addition to Group 1 and 2 expenses. Discuss with Advantage if you need. Additional Superannuation (e.g. HESTA). Meal Entertainment (restaurant and café meals. Max $200 a pay) Venue Hire (e.g. Holiday accommodation) Claim form available on Whatever expenses you salary package you must provide a copy of these expenses. E.W Tipping Foundation Salary Packaging 5

8 5. Proof of expenses Please read carefully This is the most important aspects of salary packaging. Your salary package may not start or may be suspended if you do not comply. The Tax Office requires Advantage to hold proof of the amount of expenses being salary packaged. The proof (or substantiation) we require a photocopy of the expense. The substantiation required depends on the type of expense chosen. For example: Fixed Type of Expense Document Required Expenses Mortgage Bank statement or loan agreement showing payment Personal or Car loan Bank statement or loan agreement showing payment Rent Rental agreement extract or a rent receipt Health or Life Insurance Letter from insurer, invoice or bank statement For any fixed expense, one piece of paper is sufficient proof. Provided Advantage can identify the regular, fixed amount, we do not require multiple rent receipts or bank statements. Therefore, fixed expenses are easiest to salary package. If the expense is variable, please provide a copy of each individual bill / invoice. The Tax Office does not accept estimates. Advantage must hold proof of each amount paid see below. Variable Type of Expense Documents Required + Expenses Insurance car, house Must provide a copy of the Tax Invoice* Rates Annual Rates notice preferred or each quarterly notice Phone, electricity, gas Must provide a copy of each Tax Invoice* HELP (HECS) Statement of Payment from Tax Office; Tax Assessment Credit Cards Copy of Monthly Statement circling the amounts paid (cross out any tax deductible items) School Fees Tax Invoice for each term House, car repairs Must provide copy of the Tax Invoice* for each job done Medical, dental Copy of Tax Invoice for each visit Salary Packaging Card no proof of expenses required paperless and save time! + You should copy EACH invoice in the last 12 months. The invoice does NOT have to be in the current fringe benefit or financial year. Copy as many old bills as you can. Why? The total value of the invoices copied and sent to us is included in your package not an estimate. So, for variable expenses, the more invoices you copy, the more you salary package. * Tax Invoices. If the expense includes GST (e.g., insurance, phone), you are required by the Tax Office to send Advantage a copy of the Tax Invoice. That is, the proof required is a copy of the invoice and this must have the word Tax Invoice on the document. A bank statement showing a direct debit is not sufficient for expenses with GST. However, where such expenses are paid by credit card, you can salary package the credit card, in which case we only need a copy of the credit card statement, not the invoice. If you are unsure of the substantiation requirements, please contact Advantage on E.W Tipping Foundation Salary Packaging 6

9 6. Deductions from Your Pay Once your salary package starts, you will have a fixed deduction taken from your gross salary every fortnight. This pre-tax deduction will generally be made up of two parts: An amount for salary packaging (max. $ a fortnight); and The administration fee ($8.50 per fortnight). The deduction from your pay will be transferred by Payroll to the Advantage Trust Account. Advantage will check that the pay deduction amount matches its system. Once reconciled, payment will then be made by Advantage to the bank account(s) requested by the employee. Salary Packaging Improves Your Cash Flow Our payment methodology ensures Advantage makes fixed, regular, fortnightly payments. Therefore, after each pay day, Advantage does not hold any employee funds. In our example, Judy has $ $8.50 (admin. fee) deducted each fortnight, and Advantage pays Judy $ Advantage keeps the $8.50 and Judy s account balance withadvantage is nil. This process is repeated each fortnight. Hence, your experience with salary packaging will be cash flow positive each fortnight. Refer example page Methods of Payment / Reimbursement Our payment system is simple. All payments are made via EFT (electronic funds transfer) and into a bank account(s) nominated by the employee. An employee s expenses can be paid direct (e.g. loan), reimbursed into the employee s personal bank account or deposited directly into the Salary Packaging Card (bank account). Use the Expense Type and Bank Account Form to show where you want Advantage to pay the money on the form nominate the bank account for payment. (No payments are made by cheque or into credit cards for security). An employee may choose the most appropriate method of payment. Most employees find it easier to have the salary package money simply reimbursed each fortnight. In this way, the employee maintains full control over their money and they pay their own bills. Advantage s experience suggests paying your own bills provides employees greater peace of mind. Salary packaging is not a bill paying service. You pay and manage your own bills salary packaging simply gives you more take-home pay each fortnight. The three payment methods are: 1. Direct Payment Expenses that are a fixed, regular payment (e.g. mortgage, personal loans, rent) can be paid directly to the appropriate bank account each fortnight. For example, Judy could ask Advantage to pay $400 directly into her mortgage account every fortnight. If direct payments are preferred, make sure you provide us correct bank account details. Be careful remember, if Advantage is paying loans etc. direct, payments will cease if the employee terminates or they will vary if you do not have the same pay deduction for any reason (e.g. leave without pay, insufficient pay). Most employees already have arrangements in place (i.e. direct debits) to pay loans etc.; hence reimbursement is the more appropriate method (see over). E.W Tipping Foundation Salary Packaging 7

10 2. Automatic Reimbursement Highly Recommended Most employees already have arrangements in place for the payment of loans, rent, phone etc. We suggest you do not change these arrangements. The salary packaging money can simply be reimbursed into the same bank account as your pay. This is the preferred method, as the employee maintains full control of the payment of their expenses. Expenses that are currently being paid by the employee as a regular bank account deduction (i.e. direct debit) can be salary packaged as a reimbursement into the employee s bank account. Advantage simply needs evidence of the amounts paid (e.g. copy of bank statement - see section 5 on page 6). Example. Judy already has an arrangement with the ANZ Bank where it direct debits $400 each fortnight from her savings account to pay her mortgage. Judy does not have to stop this arrangement. Advantage can automatically reimburse the $400 back into Judy s savings account. 3. Salary Packaging Card a good option The Salary Packaging Card is issued by ANZ Bank. Complete the application form enclosed. A fixed amount each fortnight (e.g. $617.29) is deposited into a bank account linked to the card, and the card may be used like a debit card. Funds should be used by 31 March each year. 8. Reports Employees will receive an Employee Salary Packaging Report prior to the commencement of their salary package. This report will be ed or sent to your home address. This report must be checked as it contains the exact information recorded on our system. Most importantly, it has the bank account details for payment. Your money will be paid into the bank account exactly as shown on your Report. Therefore, please check this information carefully. If there are any changes, please contact Advantage immediately. Once participating, you can view your salary package on-line. Information available includes; Salary package details, including bank account and your nominated expenses; Substantiation (proof of expenses) details and balance ; View transactions (payroll deductions and payments); Request changes; and Update your personal details. Around the Clock Service Visit To access your information: 1. Visit and click on Employee Log-in 2. Enter your Package Number (provided on application) under User ID 3. Enter your Date of Birth for your Password (e.g. enter 05/06/1963 for 5 June 1963) 4. Follow the prompts to set up a new password. E.W Tipping Foundation Salary Packaging 8

11 9. Information for your Payment Summary (was the Group Certificate) E.W Tipping Foundation is required by the Tax Office to report the grossed-up value of fringe benefits (known as Reportable Fringe Benefits page 4) on the employee s Payment Summary. You do NOT pay any tax on the amount reported. The amount you salary package is reported on your Payment Summary each year. The fringe benefits year is 1 April to the following 31 March. Salary packaging payments during this period are shown on the Payment Summary ending 30 June. For example, salary packaging during the FBT year 1 April 2009 to 31 March 2010 will be reported on your Payment Summary for the financial year ending 30 June For example, Judy s Payment Summary will show income of $14, and Reportable Fringe Benefits of $30,000 (i.e. $16,050 x ). Judy is taxed on only $14, How does the Payment Summary reporting affect me? As mentioned, you do NOT pay income tax on your salary packaging. However, the grossedup value will be included for most government surcharges and income tests. Your income for the purposes of the charges below will increase as a result of salary packaging: Medicare levy surcharge; HELP (HECS) repayment; and Child maintenance obligations. However, salary packaging does not adversely affect the following areas: Family tax benefits; Child care benefits; and The parental income test for the Youth Allowance. A further explanation follows. Employees should always independently check as to whether their current entitlements are to be affected. HELP / Child Maintenance / Medicare Levy Surcharge HELP repayments are calculated on your adjusted taxable income. That is, your salary plus the grossed-up value of fringe benefits. In our example, Judy s HELP liability would be calculated on $14, (salary) + $30,000 (reportable fringe benefits) = $44, Whilst Judy s HECS payments will increase slightly, her take-home pay will also increase due to the large reduction in income tax. You should salary package even if you have a HELP debt. If you have a HELP debt, we strongly recommend Advantage calculates your required HELP repayment. Most payroll systems do not deduct the correct HELP required as a result of salary packaging. We can calculate the recommended HELP amount for you to advise Payroll. E.W Tipping Foundation Salary Packaging 9

12 In relation to child maintenance payments, if you have an arrangement with the CSA (Child Support Agency), your maintenance payments are likely to increase. This is because your child maintenance payments are calculated on your salary + grossed-up value of fringe benefits. In our example, if Judy is required to pay child maintenance, this will be calculated on an adjusted income of $44, Any tax Judy saves from salary packaging may be reduced by additional child maintenance payments. Judy should think carefully about salary packaging. Similarly, your income for Medicare Levy Surcharge purposes is salary + grossed-up value of fringe benefits. In our example, Judy s adjusted income is $44, The Medicare Levy Surcharge (an extra 1% tax) only applies if you do not have private hospital health care cover and your adjusted income exceeds $70,000 as an individual ($140,000 as a family) since 1 July Judy will not pay the surcharge at this time. Calculate your adjusted income if necessary and consider private hospital cover or extra tax deducted from your pay ($40 +) if your adjusted income is likely to exceed the thresholds. Centrelink Payments (Family Tax Benefits) Salary packaging does NOT generally impact on your Centrelink payments. This is because your income is assessed as your salary plus the un-grossed amount of your salary package. You must tell Centrelink your new salary amount plus the reportable fringe benefits amount. Centrelink will then calculate your adjusted income correctly. They will calculate your entitlements based on salary + the un-grossed figure. E.g. Judy s new salary is $14, and her reportable fringe benefits are $30,000. These are the figures Judy must tell Centrelink. Centrelink will then un-gross the fringe benefits to arrive at the amount paid of $16,050 (i.e. $30,000 x 0.535). Hence, Judy s entitlements to Centrelink payments will be assessed on $30,251 ($14, salary + $16,049.54). Remember, Judy s salary prior to salary packaging was $30,472, so her entitlements to Centrelink payments may actually increase slightly due to salary packaging. It is the employee s responsibility to address any of the above matters to their satisfaction. Advantage can assist. For a detailed explanation, go to Does Salary Packaging affect the Superannuation paid by E.W Tipping Foundation? Employees receive the same employer superannuation contribution whether or not they enter the salary packaging program. All other entitlements (e.g. annual leave, long service leave) are also calculated on your gross earnings prior to the salary packaging money being deducted. In the example, all Judy s entitlements are calculated on $30,472 regardless of whether she salary packages or not. In terms of the Government s co-contribution for superannuation, you should be aware that this arrangement only applies to after tax contributions by an employee (not salary sacrifice contributions). Also, the income test to determine if you qualify is your salary + reportable fringe benefits. Seek independent advice if you need. E.W Tipping Foundation Salary Packaging 10

13 10. How Do I Change My Salary Package? Changes to your salary package may be made during the year if you have a change in personal circumstances. Otherwise, we suggest changes are made at the 12 month anniversary of your salary package (we will write to you at this time). Should you wish to change your salary package (e.g. bank account, expenses or $ amount), the changes must be in writing for security purposes. Advantage has a standard form for bank account and other changes. Use the Correspondence Form. Details may also be changed on-line at If you wish to add or change expenses in your salary package, complete the Expense Type and Bank Account Form (at end of booklet), tick amend (top right hand corner) and fax us the form and proof of the expenses listed (refer Section 5). Fax You may request a copy of the forms by (info@salary.com.au) or Changes need to be in writing to protect your security. To change your bank account, address or send us information, fill in the Correspondence Form or go on-line at To change your salary package details (amount, type of expenses), fill in the Expense Type and Bank Account Form and attached copies of the relevant bills / expenses. Leave without Pay (LWOP) An employee will be required to cease or suspend their salary packaging arrangements during any extended period of leave without pay. As a courtesy, the employee should notify Advantage if their salary packaging arrangements are going to be affected as a result of unpaid leave. There is no fee for stopping or re-commencing your salary package. How to Cease Salary Packaging Any salary packaging arrangements will cease immediately when an employee leaves the employment of E.W Tipping Foundation. An employee may also elect to cease salary packaging by giving two week s notice in writing to Advantage. We will then advise your Payroll to cease salary packaging the next pay. No fee applies to cease your salary package. Similarly, there is no fee for re-joining salary packaging. E.W Tipping Foundation Salary Packaging 11

14 11. Twelve Month Review Action Required Your salary package will be reviewed every 12 months. We will write to you at this time to confirm your salary package requirements over the forthcoming year. You may also be requested at this time to provide further substantiation for expenses you require to be reimbursed. This will mainly apply to any variable expenses (e.g. credit cards, phone, insurance etc.). After 12 months, the expenses you initially provided to start your salary package have been fully reimbursed, so the Tax Office requires us to gather another year s worth of expenses to be reimbursed. This is a process repeated every 12 months. Keep the tax man happy. Send us copies of your bills as requested.. Otherwise, use the paperless option (the Salary Packaging Card contact Advantage). You may prefer to salary package fixed expenses (mortgage, rent, personal loans). Generally, these expenses do not have to be proven each year (if they are unchanged). However, if the amount of fixed expenses has altered (e.g. rise in mortgage payments, rent changed), then you should update us every 12 months. Again, send Advantage proof of the new amount. Every 12 months we will write to you to review your salary package. Read this letter carefully. If requested, you will be required to send us copies of expenses every 12 months. So, KEEP your bills. Send them in when requested. We will send you a form to complete. Return the form and the copies of the expenses. It is very important that you follow the instructions to continue your salary package. 12. Administration Cost A Fair System The administration cost of salary packaging will be charged to each employee. The cost for each salary package is a flat fee of $8.50 per fortnight. The fee is automatically included in your salary package. It is deducted pre-tax by Payroll from your pay and does not affect the amount you are entitled to salary package (i.e. max. $16,050). There are no other fees, that is, there is no set-up, exit or variation fee. If you use the ANZ salary packaging card, this has an annual card fee of $25 (debited May each Year) Can I claim the fee as a tax deduction? No. The fee is deducted pre-tax, so it is not tax deductible. You may only claim a tax deduction for amounts paid from your taxed wages. By deducting the fee pre-tax, we achieve the same result as you paying the fee from your take-home pay and claiming the fee as a tax deduction. E.W Tipping Foundation Salary Packaging 12

15 13. How to Start Salary Packaging its easy Once you have read this booklet, please follow these steps: 1. Every employee must complete the 3 forms on the following pages: - Salary Packaging Application; - Employee Agreement; and - Expense Type and Account Form with copies of the expenses. 2. Gather your substantiation (copies of your bills) as set out in Section 5 on page 6. Your salary package may be delayed if you fail to provide Advantage adequate substantiation. 3. Send the Forms and copies of your bills to: Fax or Advantage Salary Packaging PO Box 8480 Armadale VIC Advantage will process your application within 5 business days and or send to your home address an Employee Salary Packaging Report for you to check. 5. Your salary package will commence the next available pay. Advantage will advise Payroll of the salary packaging amount and the commencement date. 14. General Salary Packaging Enquiries Advantage prides itself on the support we provide our clients. Therefore, for a fast and friendly service, please do not hesitate to contact us. We provide accurate general advice in relation to salary packaging. The enquiry service operates from 9.00 am to 5.00 pm (EST), Monday to Friday. Telephone: quote your Package Number please info@salary.com.au Fax: Website: Post: PO Box 8480 Armadale VIC 3143 E.W Tipping Foundation Salary Packaging 13

16 SALARY PACKAGE APPLICATION Send To Advantage Salary Packaging Fax Mail PO Box 8480 Armadale VIC 3143 Employee Details (Please Print) Title (Mr., Ms, Mrs.) First Name Family Name D.O.B. / / Payroll No. Position Address Suburb State Postcode Mobile Work Phone ( ) Home Phone ( ) Work Home Part Time If you work part time, enter your guaranteed fortnightly gross earnings $ Max? Do you wish to maximize ( squash ) your salary package up to 31 March? Y / N circle (if so, please attach a pay slip or nominate your gross pay per fortnight $ (meal Ent. max $200 applies) Additional Questions (answer if applicable) HELP I have a HELP (HECS) debt and my gross annual salary is $ Yes, tick the box I have a company car for private use (e.g. home to work travel.). If yes, tick the box Need More Information? Phone info@salary.com.au Declaration I confirm that the above information is true and correct. I understand the taxation and financial implications of entering into a salary package arrangement. Signature Date / /

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18 Salary Packaging Agreement This Agreement between: And: ( The staff member ) E.W. Tipping Foundation ( The Employer the Foundation ) 1. The Foundation offers salary packaging and the staff member accepts the offer. 2. The staff member will provide satisfactory documentation as requested from time to time for payments by the Foundation. 3. The staff member has been advised to seek independent advice as to the full implications of salary packaging and the potential and actual personal impact of salary packaging and reportable fringe benefits. The staff member will not hold the Foundation liable for any loss and damages arising from this agreement. 4. The staff member acknowledges that they have read and understood all the information and condition contained in the Salary Packaging Information Booklet. 5. The Foundation: a. May discontinue this agreement and any salary packaging at any time on two weeks notice without providing any reason. b. Is not responsible for any loss or damage caused by way of discontinuance c. Is not responsible for any loss or damage caused by way of delayed or misdirected payments. 6. The staff member and the Foundation mutually agree that this agreement is valid under appropriate state and federal laws and that no part of this agreement violates any industrial award or agreement. If, subsequent to the commencement of this agreement, the agreement is found to violate the state or federal law or any industrial award agreement, then this agreement is terminated, and the Foundation may elect to offer a revised agreement. Agreed and Signed by Staff Member Signed: Date: Advantage Salary Packaging PO Box 8480 Armadale VIC 3143 Ph (03) Fax (03) info@salary.com.au

19 Card Type & Amount Salary Packaging Card Registration Form Please select a card type below and nominate the amount you wish to salary package per pay cycle: A. Salary Packaging Card Amount to be deducted per salary cycle $ Primary Card OR B. Meal Entertainment Payment Card Amount to be deducted per salary cycle $ Additional Card Employer Details (Of the primary cardholder) Employer: Site/Campus: Payroll ID: If applying for an additional card Primary Cardholder full name: Cardholder Details Title: (please tick) Dr Mr Mrs Miss Ms Other: Given Name: Middle Name: Surname: DOB: / / Security Code (for identification purposes) Phone No: Mobile: Residential Address: Suburb: State: Postcode: Postal Address: (if different from above) Suburb: State: Postcode: Cardholder Authority By use of the Card, I accept that I will be liable to ANZ for any credit extended arising out of the use of the Card and agree to all applicable terms and conditions including the ANZ Commercial Card Terms and Conditions and the ANZ Business One Salary Packaging Card Cardholder Specific Terms and Conditions which can be viewed at /busone /busonetcs.asp. I declare that the details contained on this registration form are true and correct and I have read and understood (and agree to) the privacy declaration below. Signature: Date: / / Privacy Declaration Australia and New Zealand Banking Group Limited ABN (ANZ) is collecting the Cardholders information in order to provide the Cardholder with the ANZ Commercial Card. Without this information, ANZ will not be able to provide the Cardholder with the card. By signing this Salary Packaging Card Registration Form, the Cardholder acknowledges and agrees that: (a) ANZ may also use this information and disclose this information for internal administration and operations; and (b) ANZ may also disclose this information to third parties, including but not limited to salary packaging service providers, for the purposes of the administration and operation of the ANZ Commercial Card. The Cardholder may request access to this information at any ANZ branch. Access will be granted in accordance with the Privacy Act (1988) for ANZ s usual fee. If any of the Cardholder s information is inaccurate, the Cardholder may request that it be corrected. Authorised Signatory and Verifying Officer (Internal Use) I declare/confirm that I am an Authorised Signatory to this Facility and an Authorised Verifying Officer appointed in accordance with the Financial Transaction Reports Act (1988) in relation to the Facility and I certify that I have identified the Cardholder above and the details in this completed form have been given to enable ANZ to issue an ANZ Commercial Card to the above Cardholder and the above applicant is authorised to be a Cardholder to this account (by use of an ANZ Commercial Card). Signature: Print Name: Date: / /

20 Save Time Do Your Business on-line Go to Once participating, you can view your salary package on-line. Information available includes; Salary package details, including bank account and your nominated expenses; Substantiation (proof of expenses) details and balance ; View transactions (payroll deductions and payments); Request changes; View your account balance (normally zero); and Update your personal details. Log-In To access your information: Visit and click on Employee Log-in (right hand side) Enter your Package Number (provided on application) under User ID Enter your Date of Birth for your Password (e.g. enter 05/06/1963 for 5 June 1963) Follow the prompts Advantage Salary Packaging PO Box 8480 Armadale VIC 3143 Ph Fax info@salary.com.au