All non-cash benefits can be sacrificed. The important thing is that these benefits form part of the employee's remuneration, replacing what could otherwise have been paid as salary. The types of benefits employers generally provide in salary sacrifice arrangements include employer superannuation, fringe benefits and exempt benefits.
Superannuation contributions you make under a salary sacrifice arrangement to a complying superannuation fund for the benefit of an employee are not fringe benefits.
Where such contributions are paid for the benefit of an associate, such as a spouse, they are considered to be a fringe benefit. Similarly, where such contributions are paid to a non-complying superannuation fund, they will be considered to be a fringe benefit.
Fringe benefits provided in salary sacrifice arrangements are often car fringe benefits and expense payment fringe benefits, such as payment of an employee's loan repayments, school fees, child care costs and home telephone costs.
A specific provision of the FBT legislation states that certain benefits are exempt from FBT. For example, expense payments, property or residual benefits arising from the provision of certain work-related items are commonly provided in salary sacrifice arrangements. For more on the provision of certain work-related items exemption, refer to section 20.8 of Fringe benefits tax exempt benefits.
Donations made under salary sacrifice arrangements
The government has amended the FBT law from 1 April 2008 to ensure that donations made to a deductible gift recipient (DGR) under salary sacrificing arrangements don't result in employers incurring an FBT liability.