Policy No.: UP07/192
Function: Personnel
Contact Position: HR Systems and Employee Benefits - HR Services
Authoring Organisational Unit: Human Resources
Date Approved: Revised 25/09/2008
Next Review Date: 01/09/2010
Approving Body: Senior Deputy Vice-Chancellor

The University of Western Australia

University Policy on: Salary Packaging

Purpose of the policy and summary of issues it addresses:

This policy defines the nature and purpose of salary packaging as a significant attraction and retention benefit to employees of the University. It outlines the benefits, eligibility, fees and tax implications and requirements.

This policy does not apply to casuals.

Definitions:

"Employee" means a person employed by the University who has an ongoing or fixed term contract under the terms of the following Agreements (as amended or replaced from time to time)- Academic Staff Agreement, General Staff Agreement, Childcare Employees Agreement and Elicos Agreement.

"FBT In-house Residual Benefit" means an FBT exemption applies to payments for University related services to a maximum value of $1,000

"FBT Regular Payment Benefit" means an FBT exemption applies to a regular payment of a set amount.

"Supervisor" means the person who is responsible for day-to-day supervision of the employee.

"University" means The University of Western Australia.

"Work Related Items" means laptop, PDA, Tools of Trade or mobile phone used solely for work purposes.

Policy statement:

What Can Be Packaged?

Frequently Asked Questions

Salary Packaging Calculator

1 Purpose

Salary packaging is a voluntary arrangement between an employee and the University, where the employee agrees to forego part of their salary or wages in return for the University providing benefits of a similar value.

Salary Packaging is a tax effective way of receiving salary as a combination of income and benefits which -

allows employees to deduct some of their pre-tax income and use it to pay for benefits, and
can reduce the amount of income tax to be paid and increase the amount of take home pay each fortnight by reducing an employee's pre-tax income.

2 Independent Advice

It is important that chosen benefits are discussed with an independent financial advisor as -

individual circumstances will determine whether salary packaging is a benefit, and
there are tax implications which will make some benefit items unattractive to some people.

3 Eligibility

Salary packaging is available to employees with an employment contract of a minimum three months.

All salary packaging must be entered into prospectively.

4 Notification Requirements

Employees with salary packaging arrangements with the University must immediately advise Salary Packaging Section if they are -

to terminate employment with the University,
proceeding on leave without pay, or
increasing or decreasing their FTE.

5 Salary Packaging Agreement

5.1 A single Salary Packaging Agreement will cover all salary packaging at any particular time.

5.2 Once an Agreement has been signed, it will remain active and include future items. When adding new items to an existing Agreement, it is the employees' responsibility to familiarise themselves with the current policy.

5.3 A new Salary Packaging Agreement will be required for any additional packaging when the existing Agreement has been signed within the last 18 months but employment has not been continuous within this period.

6 Reimbursement

If reimbursements are required, the employee will be required to complete the Reimbursement Claim Form and attach a copy of the receipt. Reimbursements will be provided to employees through the payroll in the next available pay period after the reimbursement claim form is received by the Salary Packaging Section.

7 Fees

Salary Packaging is managed and administered in-house and is self funded through the fees charged. All fees absorb any GST component.

8 Return To Work Bonus

The Return To Work Bonus is taxed at 31.5% (as per ruling from the Australian Taxation Office). There are implications to your superannuation and salary packaging when utilising any component of the Bonus as salary packaging does not reduce your taxable income in relation to the Return to Work Bonus. Employees should seek independent financial advice and notify Salary Packaging Section of any changes to salary packaging arrangements while the Bonus is being utilised.

9 Fringe Benefits Tax (FBT)

Fringe Benefit Tax was a tax introduced in 1986 to tax the value of fringe benefits given to employees in respect of employment. Certain items attract FBT, some may be treated as concessional (eg motor vehicles) and some may be exempt from FBT. See ATO website.

9.1 All salary package items offered by the University are FBT exempt except for motor vehicles, which attract concessional tax.

9.2 Only one of each type of work related item can be purchased in any FBT year (April to March).

9.3 The University is not a Public Benevolent Institution and therefore does not have the FBT concessions that charities and hospitals enjoy.

10 Fringe Benefits Tax (FBT) Requirements

10.1 Employees with salary packaged work related items must complete a Statutory Declaration before purchase. The Declaration must state that the item is used primarily for work purposes and must be signed by both the supervisor and the employee.

10.2 Employees with a salary packaged motor vehicle under a Novated Lease must complete a Statutory Declaration stating kilometres travelled during the FBT year. The Statutory Declaration must be completed on the last day of the FBT year, ie 31 March.

11 What Cannot Be Packaged

Any earnings that are not subject to superannuation such as leave loading, overtime, casual payments and higher duties allowances may not be packaged.

For any additional information regarding salary packaging please contact -

Salary Packaging Co-Ordinator

Benefits Officer, Salary Packaging

Or email to salarypackaging@uwa.edu.au