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Salary Packaging – Remote Area

What is Remote Area Housing Benefits?

Remote Area Salary Packaging is an additional benefit available to people who work and live in an area that is deemed as remote by the Australian Tax Office (ATO). There are other criteria to meet to access these benefits, including industry and job role.

 

What are the benefits of Remote Area Salary Packaging?

Depending upon your employer and eligibility, you may be entitled to package the following items:

  • Rent (your share of the total rent paid)
  • Your Mortgage Interest
  • Your Combustible Fuels expenses (eg electricity)
  • Travel

Your Organisation determines which of the above benefits are available for you to access if you meet all of the criteria as set by the ATO. We are able to review your situation, identify if you are eligible to access these benefits and assist in the set-up process where applicable.

 

How does Remote Area Housing Benefits Salary Packaging work?

Salary Packaging Remote Area Housing Benefits is a way to reduce the amount of tax that you pay by paying certain expenses, as referenced above, through Salary Packaging. This means the tax you pay is calculated on a reduced income.

 

Remote Rent

Here is an example:
Jack and Jane are on the same income however Jack is salary packaging his rent through Remote Area Housing Benefits and Jane is not.

Particulars Jane Jack
Gross Income $55,000 $55,000
Less Salary Packaged Expenses (eg Rent) -$9,000
Assessable Income $55,000 $46,000
Deductions
Taxable Income $55,000 $46,000
Income Tax $9,422 $6,427
Medicare Levy (2%) $1,100 $915
Net Pay (per Annum) $44,478 $38,658
Minus Expenses (e.g. Rent) $9,000
Net Disposable Income (per Annum) $35,478 $38,658
Net Disposable Income (Weekly) $682 $743

 

As you can see by salary packaging his rent through Remote Area Housing Benefits, Jack pays $3,180 per year tax less than Jane which means more money in Jacks pocket every pay.

 

Remote Mortgage

Here is an example:
Jack and Jane are on the same income however Jack is Salary Packaging his Mortgage Interest through Remote Area Housing Benefits and Jane is not.

Particulars Jane Jack
Gross Income $90,000 $90,000
Remote Area Benefits packaged (e.g. Mortgage Interest) $12,500
Fringe Benefits Tax (FBT) $6,005
Less Salary Package (incl. fees) -$18,705
Assessable Income $90,000 $71,294
Tax & Medicare Levy (2%) Payable $22,732 $16,143
Net Pay (per Annum) $67,268 $55,151
Less Items to be paid in post-tax dollars (now packaged) $12,500
Net Disposable Income (per Annum) $54,768 $55,151
Net Advantage (per Annum) $383

 

As you can see by Salary Packaging his Mortgage Interest through Remote Area Housing Benefits, Jack pays $383 per year tax less than Jane which means more money in Jacks pocket every pay.

 

Combustible Fuels expenses (eg: Electricity)

What is Remote Area Fuel?

Remote Area Salary Packaging is an additional benefit available to people who work and live in an area that is deemed as remote by the Australian Tax Office (ATO). Depending on your personal circumstances and the industry you work in you may have the opportunity to Salary Package your fuel. Fuel refers to combustible fuels – these include electricity, gas, firewood etc.

The benefit of Remote Fuel is that you can Salary Packaging 50% of the fuel costs without incurring Fringe Benefits Tax. While Fringe Benefits tax is still payable in regards to a portion of your packaging.

 

Travel

What is Remote Area Travel?

Depending on your personal circumstances and the industry you work in you may have the opportunity to Salary Package your travel. The benefit of Remote Travel is that you can Salary Packaging 50% without incurring Fringe Benefits Tax. While Fringe Benefits tax is still payable in regards to a portion of your packaging.

What can you claim under Remote Travel?

  • Air Fares
  • Meals (on route only)
  • Accommodation
  • Travel to and from in your own car
  • Hire car

 

How can we help you?

Contact us today to organise an initial appointment with a Salary Packaging specialist. The specialist can provide a free financial assessment and evaluate the impact on your individual circumstances.

We provide a holistic service and can assist you in all areas of your financial life. Please click here for a full list of our services.

 

 

© 2017, John Hehir, Financial Advisers Australia

© 2017, John Hehir, Financial Advisers Australia
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