• What types of benefits can be included in a salary sacrifice arrangement?

    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 superannuation, fringe benefits and exempt benefits.

    Superannuation

    Superannuation contributions you make under a salary sacrifice arrangement to an employee's complying superannuation fund are not fringe benefits.

    Where superannuation contributions are paid for the benefit of an associate of an employee, such as a spouse, they are considered to be a fringe benefit. Similarly, where contributions are paid to a non-complying superannuation fund, they will be considered to be a fringe benefit.

    Fringe benefits

    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.

    Exempt benefits

    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 information on the exemption of certain work-related , refer to section 20.8 of Fringe benefits tax exempt benefits.

    Donations made under salary sacrifice arrangements

    Donations made to a deductible gift recipient (DGR) under salary sacrifice arrangements don't result in employers incurring an FBT liability.

      Last modified: 04 May 2017QC 17808