I am here for education please. Shortly I will have the question but firstly might I say this forum is a better area to 'chat' any day. It is all so nonsensical? in the chat rooms. One has a genuine enquiry but all they want is your ASL! Only no wonder I don't venture to download the rooms; I have grown up.

I am here for education please...on Salary Sacrifice.
I am beginning a new nursing job and in my package is the offer of salary sacrificing. I know someone out there can add some information to this 'newbie' on this topic. I will be going to our accountant on the matter as it is something I wish to pursue. The amount allocated goes out of my wages tax free and get the balance; the allocation is nominated toward the mortgage or whatever. Is there a catch? The govt can't be benefitting. One can sacrifice a little over 15g a year; surely everyone ought to rethink if this is that good. Bringing down the tax they pay and making money work better in the mortgage sounds great to me. Tell me more please, and please in laymans terms. It is only medical jargon I understand. Thanks in advance.

I believe you are being offered salary sacrifice that only non-profit/government organisations can offer (my mother in law has a similar scheme in place). I believe it was put in place to help restrain wages costs of non-profit/govt organisations by offering different incentives.

For example, with my mother in law, they have $300 tax free a fornight being put into their mortgage and $300 tax free a fortnight put onto a 'CCB' card (I think is the name) which is basically an eftpos card you can use to pay bills and buy things but not take as cash.

Though, I would definitely recommend speaking to your accountant or even your employers HR department.

"There is no point salary sacrificing for anything other than super unless you earn a bogload. You pay fringe benefit tax on monies sacrificed to cars, home loans, and childcare. This is usually more than the tax you would pay on the money if you received it.

You can salary sacrfice to super - it works in much the same way as your employer co-contribution does now. No income tax. You do pay 15cents in each dollar sacrificed to super - but the superfund pays it, it comes out of the salary sacrificed super not your remaining wages.

It can be very handy if you want to avoid a HECS debt, and don't earn much more than the point at which HECS repayments cut in. Its handy for avoiding govt reclaw of FTB. Its handy for keeping any income support, but generally, most people unless they fit into the categories above would like the cash : ) Its not worth considering at all if your salary is less than 30K, since the inhand tax rate is only 15cents. After 30K the tax rate if you take it as salary is 30 cents in the dollar, you could be saving 15cents in tax, but you don't get to use the money... If you get FTB, or have a HECS debt, you can save STACKS more. For me, once I reach 30K, my effective marginal tax rate is actually around 90cents in the dollar, meaning I only get 10 cents for every dollar I earn. e.g. If I earn 10K, I get 1K I can instead salary sacrifice to super, and get 85cents for each dollar earnt, but I can't spend it of course. Given that 10K produces 1K though, its a much better option for me.

The whole 15K limit - I am not sure where you got that info. Maybe it is something that your employer recommends. You can salary sacrifice up to 50K and I think up to 50% of your salary."

If you need any more help from my friend, give me a yell....
wearyMum