Question:
Question: salary sacrifice
What is the total salary sacrifice we can claim in relation to gross wages for all staff? Would salary sacrifice result in reduced requirement for child support?
Answer:
Recent changes are outlined below:
There is no limit on the amount of salary which can be sacrificed, from a taxation perspective. The requirements are that the arrangement must be entered into before the wages are earned. However, keep in mind any award or other industrial instrument obligations. If you allow an employee to sacrifice her salary to the extent that the actual salary received falls below the award wage, you run the risk that the employee may later sue you for underpaid wages. Awards prescribe minimum wages and don’t necessarily make allowances for salary sacrifices.
Child support payments are determined by reference to the parent’s taxable income plus reportable fringe benefits plus rental or other investment losses plus reportable superannuation contributions. If a salary sacrifice results in an employee receiving a reportable fringe benefit, or as having reportable superannuation contributions, there would be no effect on the child support payments.
July 1, 2022
- Loss carry back for eligible companies extended to cover 2023 income year.
- Professional firm profits diverted to the professional's spouse or other associates to be reviewed under new Tax Office guidance.
- Corporate collective investment vehicle legislative regime introduced.
- Temporary full expensing of depreciating assets extended to include 2023 income year.
- Depreciable assets of a company joining a tax consolidation group have tax costs setting rules modified for assets depreciated under temporary full expensing rules.
December 9, 2021
- Reduced Pandemic leave disaster payment of $750 per week made available through to 30 June 2022.
August 5, 2021
- COVID-19 Disaster Payments are non-assessable non-exempt income in 2021 income year and later. Payments phasing out as vaccination rates increase.
July 1, 2021
- New Investment Engagement Service launched for businesses planning significant new investments in Australia.
- Tax Office small business independent review service made permanent for businesses with turnover < $10m, for income tax, GST, exercise, luxury car tax, wine equalisation tax and fuel tax credits. Requested before amended assessment issued.
- Small business income tax offset for individuals increased to provide a reduction of 16% for a tax payable up to $1,000.
- Self-managed superannuation funds can now have six members, increased from four members previously.
July 1, 2021
- Some COVID -19 state and territory business grants received by small and medium enterprises are non-assessable, non-exempt income for 2021 and 2022 income years.
- Certain state, territory and local government financial support for individuals and businesses suffering COVID-19 impacts made exempt where businesses have turnover less than $50 million and only in eligible programs.
March 31, 2021
- JobKeeper payments scheme ended.
October 5, 2020
- Boosting apprenticeship commencements subsidy (up to 50% of apprentice's wages) is assessable income.
June 4, 2020
- Homebuilder grant for new home or substantial renovation construction is not subject to income tax.
April 1, 2020
- COVID-19 cash flow boost payments are not subject to income tax
