Salary packaging is one of the most valuable benefits a not for profit employer can offer, and one of the few that lifts your team’s take home pay without adding to your salary budget. The catch is that running it well takes real tax expertise and careful compliance. That is exactly why most organisations partner with a specialist provider rather than doing it alone. Here is what that means for you.
What salary packaging does for your people
Salary packaging lets eligible employees pay for certain everyday expenses out of their pre tax salary. Because those costs come out before tax, their taxable income falls and their take home pay rises. For staff at eligible not for profit organisations the benefit is especially generous, thanks to Fringe Benefits Tax concessions the sector is entitled to. The same salary can go noticeably further, which matters enormously when you are competing for good people against larger or better funded employers.
For you as the employer, that is a powerful thing to be able to offer. It improves the real value of every role at no extra cost to your salary budget, and it signals that you look after your team. The concessions already exist for eligible organisations, so not offering packaging effectively leaves value on the table for your staff.
Why not just run it in house?
Some organisations do administer packaging themselves, and for those that want to, Eziway even offers software to make that possible. But running a compliant program by hand is a serious undertaking. You need to understand the different FBT caps, apply them correctly for each employee, keep accurate records, manage claims and reimbursements, and report everything correctly at FBT time. Get it wrong and the organisation carries the risk.
Partnering with a specialist provider takes that weight off your team. The provider brings the tax expertise, the systems and the employee support, so your people get the benefit and your payroll team is not left carrying a complex compliance burden on top of their day job.
What a specialist provider actually handles
- Compliance. The provider keeps your program aligned with ATO rules, applies the correct caps, and manages FBT reporting and record keeping.
- Employee support. Your staff get real people to talk to, plain answers to their questions, and easy claiming through a card and an app.
- Administration. Claims, reimbursements and statements are handled through purpose built technology that fits alongside your payroll.
- Sector expertise. A good provider knows the not for profit, health and education sectors inside out, so nothing gets missed.
What to look for when choosing
Not every provider is the same, and because packaging touches both your people’s pay and your compliance, it pays to choose carefully. The things that matter most are genuine experience in your sector, strong compliance credentials, responsive service that treats your staff as people rather than ticket numbers, technology that makes packaging easy for everyone, and clear, honest pricing. If a provider is vague about any of these, keep looking.
The cost of getting salary packaging wrong
Salary packaging is generous, but it sits on top of tax rules that carry real consequences if they are mishandled. Applying the wrong cap, missing a reportable fringe benefits obligation, or keeping incomplete records can expose your organisation at FBT time and chip away at the trust your staff place in the program. For a not for profit, where budgets are tight and reputation matters, that is a risk worth taking seriously.
This is the quiet value a specialist provider adds. They keep your program correct, your records clean and your reporting accurate, so the organisation is protected and your people can be confident their pay is being handled properly. You get the upside of the benefit without carrying the compliance exposure that comes with it.
A benefit that helps you attract and keep good people
The not for profit sector rarely competes on salary alone, so the value you can add around pay matters enormously. Salary packaging is one of the few levers that lifts an employee’s take home pay without increasing your wage bill. That makes every role you advertise more attractive, and it gives your existing team a concrete, ongoing reason to stay.
In a tight labour market, being able to say that you offer full salary packaging, administered well, is a genuine advantage when a candidate is weighing you against a larger or better funded employer. It signals that you look after your people in practical, financial terms, not just in words.
Moving providers is easier than you think
If you already offer packaging and are frustrated with your current provider, the fear of disruption is often what holds organisations back. It should not. A capable provider manages the whole transition for you, moving employee arrangements across, coordinating with your payroll team, and communicating clearly with staff so nobody is left confused about their pay. Done properly, changing providers feels like a weight lifted rather than a project landed on your desk.
Common questions from employers
Does offering salary packaging cost us more?
Generally no. The benefit is funded from the employee’s own pre tax salary and the tax concessions your organisation is entitled to, not from your salary budget. With a provider managing it, the day to day cost and effort on your side stay low.
Is it a lot of work for our payroll team?
With the right provider, very little. They handle the calculations, compliance, reporting and employee questions, while your payroll team simply processes the agreed deductions, much like any other pay arrangement.
Which of our staff are eligible?
Eligibility depends on your organisation type and the current rules. A specialist will confirm exactly what your people can package and how much, and explain it to them in plain language.
Why employers across the sector choose Eziway
Eziway has focused on Australia’s not for profit sector since 2007. We pair deep compliance expertise with genuinely personal service, real people who know your organisation, and technology that makes packaging effortless for staff and payroll alike. We call ourselves a no noise partner because our job is to make salary packaging simple and valuable, then stay out of your way.
If you are weighing up whether to offer salary packaging, or looking to move from a provider that is not delivering, we would welcome a straightforward conversation about what a well run program could do for your team. Get in touch and we will make it easy.
Disclaimer
- This article is general information only and does not take your personal or organisational circumstances into account. It is not financial, taxation or legal advice.
- Salary packaging and novated lease rules, caps and Fringe Benefits Tax treatment depend on your situation and current legislation, and can change.
- Please speak with Eziway and seek independent advice before making a decision.