Salary Package Calculator
Salary Packaging
Salary packaging (also known as salary sacrificing) is an arrangement between an employer and employee where the employee agrees to forgo part of their future salary or wages in return for benefits of a similar value. This can result in significant tax advantages as these packaged items are paid with pre-tax dollars, effectively reducing your taxable income.
Common salary packaging options include:
- Vehicle expenses: Car leases, maintenance, and running costs
- Mortgage or rent payments: Housing expenses can be packaged in certain industries
- Meal entertainment: Restaurant meals and venue hire for social functions
- Work-related expenses: Laptops, phones, and professional development
The benefits of salary packaging vary depending on your income level, tax bracket, and the specific benefits you choose to package. Our calculator helps you understand the potential financial advantages based on your unique circumstances.
How to Use Our Salary Package Calculator
Step A: Enter Your Salary Information
Begin by entering your annual gross salary in the first field. This is your total salary before any tax or deductions are applied. Next, select your appropriate tax rate from the dropdown menu based on your income bracket. You can also adjust the superannuation rate if your employer contributes a different percentage.
Step B: Select Packaging Options
Check the boxes for any salary packaging options you wish to include in your calculation. For each selected option, enter the annual amount you plan to package. Common options include car leases, mortgage/rent payments, meal entertainment, and work-related expenses.
Step C: Choose Payment Frequency
Select how often you receive your salary payments (weekly, fortnightly, monthly, or annually). This helps the calculator break down your savings into meaningful periods that match your payment schedule.
Step D: Review Your Results
After clicking "Calculate Package," review the detailed breakdown comparing your standard salary arrangement with the salary packaging option. Pay special attention to the "Potential Savings" section, which highlights your annual tax benefits and per-payment period savings.
Step E: Adjust and Recalculate
Experiment with different packaging amounts and options to find the optimal arrangement for your situation. You can adjust any input and recalculate to see how changes affect your potential savings.