Salary packaging with a HELP/HECS debt
You could still potentially benefit from salary packaging even if you have a HELP (Higher Education Loan Program) or HECS (Higher Education Contribution Scheme) debt.
Understanding your 'adjusted taxable income'
Although salary packaging could reduce your taxable income (for the purpose of paying income tax), it could also increase the gross value of your salary. This is referred to as your 'adjusted taxable income'.
Your adjusted taxable income equals your salary plus the gross value of your fringe benefits.
How your adjusted taxable income impacts HELP and HECS repayments
The Australian Taxation Office (ATO) assesses you on your 'adjusted taxable income' when working out how much you should pay in HELP or HECS repayments. So with an increased gross salary, you may need to increase your regular HELP or HECS repayments, otherwise you may end up with a bill at tax time.
Before you start…
The Queensland Government strongly recommends prior to entering into or changing your Salary Packaging Agreement that you seek independent financial advice.