Tax time can be stressful, however a little understanding can go a long way during EOFY, even if there is nothing you need to do. Read on to find out what you should know about the EOFY and your salary packaging.
Beware the ‘double dip’
If you’re salary packaging any ‘exempt’ expenses (those that don’t incur Fringe Benefits Tax), such as professional memberships and subscriptions or airport lounge memberships, you’ve already received the full tax benefit for those expenses - so you can’t claim any extra deductions in your annual tax return.
What you need to include on your return
You’ll see that you need to include your ‘Reportable Fringe Benefits’, which are any of the benefits you salary packaged that financial year. They will be recorded as a separate item on the annual payment summary from your employer (if the value exceeds $2,000).
What does 'Reportable Fringe Benefits' mean?
With the exception of exempt benefits, each fringe benefit has a Reportable Fringe Benefit value, which is shown as a grossed-up taxable value (GUTV), on your payment summary. The GUTV of a benefit is the salary that you would have to earn in order to purchase the benefit from after-tax dollars.
How could fringe benefits affect me?
The benefits you choose to salary package may impact some income-tested government assistance and concessions. For example, the fringe benefits reported on your payment summary may be used to calculate liability for child support or HECS/HELP repayments.