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So what do I need to do to be EOFBTY ready?
The FBT year ends on the 31st of March, which means that all Salary Packaging or Entertainment benefit claims must be received and processed before this date.
Most of our clients opt-in to use our all-in-one Salary Packaging and Meal Entertainment cards which take the hassle out of claims.
If you do hold an Eziway Salary Packaging or Meal Entertainment card, you need to try and get your card balance to $0.00 before April 1 or your Salary Packaging arrangement could be affected just like Bill's.
HELP! How do I get my balance to $0.00?!
If you're running out of ideas on how to spend your remaining balance on your card, here are some nifty little tricks to help you clear your card balances sooner.*
Salary Packaging Card:
Entertainment Benefits Card:
*If a payment works then it is compliant, so hop online and spend your balance. You must buy direct from a vendor or service provider. Aggregated booking sites do not work with the card.
If you're new to Salary Packaging, or maybe you're thinking about it - Fringe Benefits Tax (FBT) might be like talking in another language. So, before we get into what you need to do let's break up some common FAQs
What is Salary Packaging and why do you have a new year for it?
Salary Packaging is an ATO approved method of restructuring your salary by reducing the tax you pay and increasing your net take-home pay. If you work for an organisation that offers Salary Packaging, this arrangement needs to be compliant with the Fringe Benefits Tax Legislation. This type of tax is separate from income tax which is why it has its own year, starting on April 1 and concluding on March 31.
If you're interested in learning more about Salary Packaging check out our Help Centre. It's packed full of resources to help you discover your potential tax savings with Salary Packaging. Now let's get back to the FBT year…
What is the FBT 'cap' and why is it important?
The ATO decides which organisations are exempt from paying Fringe Benefits Tax, allowing you as an employee to pay for items using pre-tax dollars up to a certain amount or commonly referred to as a 'cap'.
If you work for a PBI (Public Benevolent Institution) most charities, disability service providers and aged care operators are classified as PBI’s. This is $15,900.00 net per FBT year. If you work for a Public Health organisation such as a hospital or health care provider, your cap is $9,010.00 net per FBT year. It's common to hear the phrase "salary packaging to the cap", this just means they are maximising the amount they save.
The FBT cap is an essential component of your Salary packaging arrangement because it doesn't carry over year on year. You have one year to package that amount and if you have any outstanding balance left on your Salary Packaging Cards, then that gets deducted from your cap the following year.
Let's continue Bill's story from our 'What is Salary Packaging Page':
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So Bill packages to the cap ($15,900) and by March 31st he has $1,000 left on his Living Expenses Card. Once the clock hits midnight the FBT year has officially ended, which means in the new FBT year (2022-23) he's only allowed to package $15,900 as a maximum – given that he still has $1,000 left in his account he will ONLY be allocated $14,900 to ensure he doesn't exceed the ATO legislated cap.
Bill has lost out on potential tax savings because he didn't heed our warnings! But that's okay because you're here and you want to know how to not end up like Bill…
Still, need help? We're only one call away!
No matter the time of year, we are always here to help. At Eziway, we have dedicated Client Service Officers that look after your organisation, which eliminates those dreaded long wait times and ensures all enquiries are answered promptly and professionally…WITHIN SECONDS.
If you prefer the digital route, we have many options to get the information you need:
The Eziway Team
1800 932 394 | admin@eziway.net.au
This information is general and does not consider your circumstances. Whenever you are making decisions that affect your income and financial affairs, you should consider seeking independent financial advice. © Copyright 2022 Eziway Salary Packaging Pty Ltd
