All Topics / General Property / Salary Sacrifice on PPoR

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  • Profile photo of dare_to_dreamdare_to_dream
    Join Date: 2006
    Post Count: 88

    Hi guys,

    I was talking with some friends about salary sacrificing the other day and I found out they in some government jobs (including theirs) they are allowed to salary sacrifice their own home loan. I talked to the company I work for and they only have salary sacrifice into your super.

    This seems VERY unfair to me that some companies allow salary sacrifice where as others do not. Can someone please explain why this may be and who decides whether they will allow salary sacrificing or not??

    Is it something that you can talk to an accountant or laywer about getting organised if the private company I work for doesn’t do it.

    Any responses/thoughts will be greatly appreciated!


    Profile photo of L.A AussieL.A Aussie
    Join Date: 2006
    Post Count: 1,488

    I think what they are referring to is ‘salary packaging’.
    This exists in the health industry (my wife is a nurse) and other govt industries as well.
    You are allowed to have a certain amount of your wage deducted before tax is applied, so you only pay tax on part of your wage.
    The deducted funds are then paid towards loans, or utilities such as elec, gas, water – even going out to dinner.
    We used to apply it to our investment loan and our credit card payment. It was a great lurk!
    It is something set up by the govt for govt employees as far as I know, and I don’t think it exists outside these selected industries.
    You can try asking your accountant/lawyer, but I don’t know that they can do much.

    [email protected]

    Profile photo of dare_to_dreamdare_to_dream
    Join Date: 2006
    Post Count: 88

    Thanks Mate,

    The couple I was talking about one works as a nurse (like you said) and the other is a police officer. I know the wife that works as a nurse gets the salary packaging which would confirm your thoughts.


    Profile photo of TerinaTerina
    Join Date: 2006
    Post Count: 1

    My experience with salary sacrifice is that it is variable depending on what occupation you are in. I worked for a charity and in that job I could sacrifice just about anything – including lots of personal items like loan repayments, up to 50% of your wage – but it was because as a charity they didn’t have to pay fringe benefit tax (which is outrageously high if you are not a charity). I now work for the government and have looked at there salary sacrifice packages and found that it is just not worth it. The rational about allowing some charities such scope is that they pay badly in the first place (true) therefore they need to do something extra to keep quality staff.
    For what it is worth.

    Profile photo of ducksterduckster
    Join Date: 2004
    Post Count: 1,674

    The reason is due to fringe benefits tax. Under s26-110 Not all benefits are subject to FBT.
    Sec57A(2) old legislation benefits provided by certain public and non-profit hospitals to their employees are exempt from FBT
    I suspect it is from a court case ruling Mines Rescue Board of NSW v FC of T (2000) and (Metropolitan Fire Brigades Board v FC of T (1990)
    The reason given by the judge was The appellant operates a mines rescue facility in the each «of» the four coal mining regions
    in New South Wales and has a mines rescue station located there. As the principal function is to provide an emergency service, its staff must be ready to respond at short notice.

    Relationship to nurses

    Nurses have to respond to recalls quickly which requires staff to live close to the hospital they work at.
    ATO takes the view that normal employees can choose to live further away from their employer at cheaper purchase costs but in doing so higher travel expenses incurred to get to work can’t be claimed.

    Most tax law comes from historic tax case judgement rulings that then create the prevaling tax ruling or laws. This is why it may seem
    unfair to the average tax payer until you look deaper into the ratio decendi (reason for judgement decision).

    Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

    Profile photo of NicsterNicster
    Join Date: 2006
    Post Count: 4

    As far as I’m aware, it’s part of Government workers package that they are entitled to salary sacrificing. Not all government workers take up the option as you have to pay an organisation monthly fees to look after the salary sacrificing. If you work for a private company, they can outsource a company to handle their employees salary sacrificing however it’s limited as to what you can salary sacrifice & only seems beneficial if you use your car heaps & need to purchase computer equipment etc.

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