Salary Packaging Or Salary Sacrifice: Information And Benefits

Salary packaging is a system which is also known to be salary sacrifice and this is where an employee working under an employer agrees into a contract with his or her employer such that the contract states that this employee would give up his privilege to receive a certain portion of his salary every month. The employer, in turn, agrees to provide the employee some non-cash benefit or service in return to the percentage of money that the employee waived. There are certain terms and conditions that both the employee and the employer must fulfill in this salary packaging or salary sacrifice scheme so that it can be deemed successful.

Once you are sure that you are going to enter into a salary sacrifice or salary packaging scheme, then it is important that you gather enough information about the system such as the benefits that you are entitled to, the steps that you need to take in order to begin such an undertaking and all the legal laws that are in relation with such systems. The reason for this is because once you have signed the document and you have agreed to the arrangement, then there is no backing out and you would inevitably have to give up your percentage of income even if later on, you find something disagreeable about the project.

An employer or owner of a certain business who is contemplating on the fact that he or she wants to offer salary sarifice as a feature to his or her employees needs to seek the legal and expert advice of a consultant before he finalizes any decision that he has so that once the contracts are finalized, he or she is sure that both the company and the employee would benefit from such an arrangement.

The first and most fundamental benefit that an employee can gain from entering a scheme such as a salary sacrifice is that he or she would be able to save up more money from the taxes that he or she should supposedly pay for a certain commodity that he or she has allowed the company to pay for in exchange for a certain percentage of his or her overall  salary for a month or a year. A number of the more common benefits that are usually offered in a salary packaging system are the following: car parking or bicycle parking allowance, pension expenses or other health concern expenses.

One of the most popular benefit that are offered in salary sacrifice contracts are in the form of vouchers for child care or financial support for children such that the employees who are also parents are given the chance to go back to work even after the birth of their child without ever worrying for additional expenses that a baby can cause. Such is also advantageous to the business since such can be used to recruit talented workers into the company.