Member's Guide to ADF Pay and Conditions in Australia – see Disclaimer – check PACMAN for full details

 

3.4 Salary packaging

 

How does it work?

You can convert up to 100% of your salary (including service allowance) to a range of items.

 

What items can I access under salary sacrificing?

You can access one or more of the following items.

 

·          A motor vehicle through a novated or associate lease arrangement. This does not include motor cycles or commercial vehicles.

·          Employer-provided childcare (i.e. childcare provided on Defence premises).

·          Additional superannuation contributions. They must be paid into a complying fund under the Superannuation Industry (Supervision) Act 1993. Contributions may be made into the MSBS scheme.

·          Income protection insurance.

·          Briefcases, calculators and electronic diaries.

·          Mobile phone expenses. The phone must mostly be used for business purposes.

·          Laptop and notebook computers.

·          Airline lounge membership.

·          Salary packaging advice.

·          Work-related computer software.

·          Home office expenses that are work related.

·          Work related travel expenses that Defence approves but does not pay for. This includes fares, meals, accommodation and incidental expenses.

·          Membership fees to professional associations.

·          Subscriptions to professional journals and publications.

·          Taxi travel. You must be dependent on taxi travel to travel to and from work due to a disability.

·          Newspapers and periodicals. These must be directly related to your work.

·          Uniforms. This does not include uniforms provided for under uniform allowance. It also does not include protective clothing. 

·          Self-education expenses that are work related.

·          Tools of trade.

 

Is it a good deal?

That depends, and you may need financial advice to see if it will save you money. Some or all of the costs of the item are paid from money before it is taxed. You may have to pay other fees, which might be more than that saving.

 

These could include establishment and administration costs, fringe benefits tax and superannuation taxes. Before signing up you should get financial advice. This is especially true for the larger items such as a car or superannuation.

 

What else?

Your 'pre-package' salary will still be used for some things.

 

·          To work out superannuation contributions and benefits.

·          To work out compensation payments.

·          To work out final entitlements on separation from the ADF.

 

Being in the scheme will not affect the amount of other charges you must pay.

 

·          Medicare levy.

·          Child support payment.

 

Want more information?

You can find more information on http://www.smartsalary.com.au. Also on the ATO site on salary sacrificing superannuation.

 

Application to Reservists:  No, except for Reservists on continuous full-time service. The salary packaging arrangements must be completed in the period of full-time service.

 

Reference:  Defence Workplace Relations Manual, Chapter 9 Part 4 (See http://www.defence.gov.au/dpe/pac/.)