Payroll, super and FBT

Salary sacrificing

Salary sacrificing is an arrangement in which an employee agrees to give up part of their future salary in return for the employer providing something else of similar value, such as extra super contributions or a benefit. The arrangement must be in place before the employee earns the salary. Contributions to super under such an arrangement are treated differently from non-super benefits: other benefits provided can be fringe benefits and attract FBT for the employer, even though the employee has given up cash. The ATO explains how FBT applies and which benefits are exempt. A written agreement and accurate payroll records help show what was agreed.

General information, not tax advice. The rules change, so check the source page above for the current position. Fedix is developed by Tax7 R&D Pty Ltd.