Remote Area Salary Packaging:

What are the advantages or Remote Area Packaging

Salary Packaging certain items attracts FBT or Fringe Benefits Tax. Remote area packaging allows you to halve the FBT tax required to be paid on certain items such as Rent, Mortgage Interest and Electricity.

Because of this Remote Area packaging allows you to increase the limit you are able to package.

 

Are you eligible?

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). We are able to determine if you live in a remote area.  For example some areas, such as Gympie may not appear to be remote, but they are classified to be so by the ATO.


Here is an example:

Jack is packaging his rent utilising the remote area benefit and Jane is salary packaging her rent without the Remote area benefit on the same income.

 

Jane

Jack

Gross Income

$55,000

$55,000

Less Salary Packaged Expenses (eg Rent)

$9,000

$18,000

Assessable Income

$46,000

$37,000

Deductions

-

-

Taxable Income

$46,000

$37,000

Income Tax

$7,350

$4,650

Medicare Levy

$690

$555

Net Pay (per Annum)

$37,960

$31,795

Minus Expenses (eg Rent)

$9,000

-

Net Disposable Income (per Annum)

$28,960

$31,795

Net Disposable Income (Weekly)

$557

$611

As you can see by packaging his rent as a remote benefit Jack has been able to double the benefit of packaging his rent and saved himself a further $2,835 per year then Jane.  Jack is saving himself an additional $5,670 then when he was not packaging at all.

What would you do with an addition $5,670?

 

How can we help you?

We can talk with you about your individual situation as everyone is different and the results may vary depending on your individual situation.  It is also important to note that the above example is not applicable to everyone.

Book an appointment to determine what you are entitled to, what best suits your personal situation and to ensure that you are maximising your available benefits.

A small investment of time now may result in years of savings. 

 

Prepared by John Hehir - Financial Advisers Australia (FAA)