Are casual employees allowed to salary package?
You might have heard that salary packaging is only available to full-time staff – but this isn’t the case! The ATO allows full-time, part-time or casual employees to access pre-tax dollars through salary packaging.
It will depend on your industry and employer what your exact salary packaging benefits are as a casual employee.
How does salary packaging work for casuals?
Many casuals have a fluctuating income each week. If this is your situation, you will need to salary package a percentage of your pre-tax income, instead of a fixed amount.
For example, you could choose to salary package 30% of your income each pay cycle. This amount will be allocated to your nominated benefits.
You can think of this initial percentage as just an estimate to get you started. You can always increase or decrease this number once you get into the swing of things, to help you maximise your cap limit each Fringe Benefits Tax year.
You may be able to spread your salary packaged funds across different benefits and split your estimated percentage across those nominated benefits. Make sure to check with your employer how salary packaging works at your company.
You don’t need to work a minimum number of hours or earn a minimum amount to salary package your income.
A point to note though: Employees earning less than the tax-free threshold of $18,200 may not have to pay income tax. How much you could save through salary packaging could be impacted if you earn less than, or just above the tax-free threshold. We recommend you seek independent financial or taxation advice before proceeding with salary packaging.
How much can I salary package?
It depends on your industry and what types of expenses you are salary packaging.
You could be eligible to salary package living expenses if you work for a:
- private or public not-for-profit hospital – up to the $9,010 cap limit
- charity or other not-for-profit organisation – up to the $15,900 cap limit
The benefits you could be eligible for comprise a range of fixed and variable expenses.
There are also uncapped benefits, which generally all industries can salary package. These include things like work-related expenses, self-education and much more.
Other popular salary packaging benefits include novated leasing (salary packaging a car) or additional super contributions.
Important things to know
Not all workplaces will offer salary packaging to casuals, so please speak to your employer.
Things you need to know: This general information doesn’t take your personal circumstances into account. Please consider whether this information is right for you before making a decision and seek professional independent tax or financial advice. Conditions and fees apply. The availability of benefits is subject to your employer’s approval. RemServ may receive commissions in connection with its services.
Remuneration Services (Qld) Pty Ltd | ABN 46 093 173 089 (RemServ)