Good afternoon members,

I hope this week is treating you well.

Seeking your expertise and experience with salary sacrifice for staff to inform our initial scoping. If it's something you could possibly assist with, please see details following (otherwise feel free to move on!).

We have received a request from a staff member to salary sacrifice their mortgage payments. We're conscious that salary sacrifice can be a significant incentive for staff which we would like to make available to the team in a comprehensive manner should we implement, but we'd appreciate any experience and advice.

PACA currently has salary sacrifice in place for Superannuation only which does not attract FBT tax.

Maria and I have conducted some initial research that suggests that:

Salary sacrifice payments such a mortgage and car payments attract FBT tax, which is the employer's responsibility with the ATO.
It is possible for the employee and employer to enter into an agreement where the employee part or fully pays the FBT component to the employer with after tax funds (in which case the employee should consider the cost benefits of their request).
PACA is a NFP and registered charity, but we do not have an FBT exemption in place.
FBT exemptions (to a capped amount) only apply for public benevolent institutions and health promotion charities, registered by the Australian Charities and endorsed by the ATO. As such, I don't believe PACA would be eligible.
PACA will incur additional financial management (time) and audit costs in delivering a salary sacrifice program including FBT.

Are any members able to provide any advice about the above information, your experience or relevant policies?

Many thanks for your assistance,

Lynda

Lynda de Koning

(she/her)

General Manager | PAC Australia | +61 (0) 438 860 020 | paca.org.au
Peramangk / South Australia GMT +9.5

I gratefully acknowledge the Peramangk people, on whose lands I live and work, and recognise their continuing connection to Country. I pay my respects to Aboriginal and Torres Strait Islander cultures, and to Elders passed and present. Always was, always will be.

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