Join us as we unpack the implications of tax time for not-for-profit industry employees, providing insights into grossed-up figures, income statements, and the process of lodging your tax return.

Salary Packaging and Tax
As an employee within the Not-for-profit sector, it is helpful to understand how Salary Packaging influences your annual tax return.

From the 1st of April to the 31st of March, you will have received a portion of your wages ‘tax-free’, through your salary packaging arrangement.

If you received your industry’s full annual Salary Packaging Living Expenses cap and are;

• Working in a Public Benevolent Institution, you will have packaged a total of $15,899
• Or, working in a Public Health Organisation, you will have packaged a total of $9,009

Grossed up figures
The ATO requires your employer to report this total using grossed-up calculations, known as your reportable fringe benefits amount (RFBA).

Your RFBA is 'grossed-up' to reflect the pre-tax income you would have had to earn, at the highest marginal tax rate. The amounts or figures calculated on your benefit capped amount reported on your end-of-year Income Statement is calculated at:

$15,899 x 1.8868, equaling $30,000 for Public Benevolent Institution

or

$9,009 x 1.8868 equaling $17,000 for Public Health Organisation

Meal Entertainment Benefits
In either industry, if you claimed Meal Entertainment expenses such as Dine-In Meals, Accommodation, Venue Hire and Catering to the annual cap of $2,649.98, the grossed-up calculation will be added to your reportable Living Expenses amount.

The reported amount is grossed up from $2,649.98 to $5,000.

Calculation: $2,649.98 x 1.8868, equaling $5,000

Income Statement
Viewing your annual income statement is easy nowadays and accessible from the online ATO portal, linked to your MyGov Account.

To access your annual Income Statement go to the - ATO quick link - in your MyGov account.

Once your employer has finalised your income tax data, you will receive a notification in your MyGov inbox stating that your income statements are ‘Tax Ready’.

From the ATO main screen go to the Employment Tab and select Income Statements.

View the Tax Ready income statement by clicking the ‘down’ arrow to the right.

At the bottom of the drop-down information, select the Print Friendly Version button, to view the entire Income Statement.

Here you will view:

• Your annual Gross income.
• PAYG Tax withheld.
• And if you scroll to the section titled Reportable Fringe Benefit Total in the Other Amounts section you will see the total, reportable amount that you received via Salary Packaging, through the Fringe Benefit Tax year.

Lodging your Tax-Return

Your tax return can be lodged 3 ways, via a registered Tax Specialist or Accountant, ATO-endorsed tax portal or ATO Tax Return for Individuals form.

• Using an accountant or income tax specialist means your tax return will be calculated and lodged in line with requirements applicable to employees in the not-for-profit sector.
• If you are lodging your own tax return via the ATO-endorsed MyTax portal information will be pre-filled from your employer, banks, government agencies, health funds and third parties by late July.
• If you are lodging your own tax return via the ATO Tax return for individuals Form, enter the Reportable Fringe Benefits Total in question IT1, Section N, on Page 8. Section N is reserved for employees working in the not-for-profit sector.

Once you’ve lodged your tax return, the ATO uses the Reportable Fringe Benefit Total and your taxable income to calculate your entitlements for benefits and services such as Centrelink payments, Child support and HECS debt contributions.

What happens next?

Most online returns process within 2 weeks (14 days), manual processing can take up to 30 calendar days and paper returns can take up to 10 weeks.

For more information on how Salary Packaging can benefit you personally,

Login to the MyEziwayAccount app where you can access and manage your salary packaging arrangement 24/7.

Disclaimer

“Whenever you are making decisions that affect your income and financial affairs, you should consider seeking independent financial advice.”