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Procedure: Salary sacrificing

Purpose

To provide advice to eligible staff on the University's salary sacrificing arrangements.

Procedure

What is salary sacrificing?

  1. Salary sacrificing is provided for under the ANU Enterprise Agreement.
  2. Salary Sacrificing (or packaging) means salary packaging/deductions for benefits from a staff member's pre-tax salary.
  3. Salary sacrificing is optional and voluntary. It is a process that allows an employee to swap salary for employer provided benefits. These benefits are either tax-free or concessionally taxed.
  4. Staff members may salary sacrifice up to 99% of gross salary for certain approved items. A staff member may elect in writing to the University to have his or her gross salary reduced by the total value of approved items.
  5. Staff wishing to salary package any item should read and consider the general conditions (below) and the specific conditions for the item being packaged before doing so (see table below).
  6. A staff member may terminate or change his or her salary sacrificing arrangements as determined by the University. If legislative or other changes result in increased cost to the University arising from the arrangements provided under this clause, the University may discontinue these arrangements, unless the staff member agrees to pay the additional costs.

In-house (ANU) options

  1. The University administers limited salary sacrifice options including: on-campus childcare; UniSuper; on-campus parking; laptop computers/electronic diaries/personal digital assistants (PDAs); and airline lounge membership. In house benefits are limited to those items that do not attract a Fringe Benefits Tax.
  2. Staff members wishing to salary sacrifice through ANU should complete an appropriate payment authority form. Completed applications should be forwarded to the Remuneration and Conditions Branch, Human Resources Division, Chancelry 10A. Deductions will commence from the next available pay period from receipt of the application as determined by work commitments within the Remuneration and Conditions Branch. To ensure a specific start date, applications must be received one month in advance.
  3. Staff members are responsible for all relevant documentation (i.e. completed authority forms and banking details) being received in the Remuneration and Conditions Branch. Check each institution for details.

Additional salary packaging options through SmartSalary, nlc, and Selectus

  1. Additional salary sacrificing options (eg private superannuation and motor vehicle novated lease arrangements) are available through the University's salary sacrificing provider (currently SmartSalary, nlc, and Selectus). Further details on eligibility, providers, and how to progress a salary packaging arrangement are available on the HR Division salaries and benefits page.

General conditions

  1. It is important that staff members seek financial advice (at their own expense) from an independent financial adviser, tax consultant or accountant before considering any salary sacrificing options and entering into any salary sacrificing arrangement. In particular, the effect salary sacrificing may have on Child Care Benefits eligibility needs careful consideration.
  2. Salary sacrificing is available to all continuing staff members and may be available to fixed term staff members on a case-by-case basis. This arrangement is not available to casual staff members, academic visitors or students.
  3. Notwithstanding the salary rates for various classifications, a staff member will be able to enter into salary sacrificing arrangements which may result in his or her net pay being reduced.
  4. The pre-sacrificed salary rates shall be used as the basis for calculating the following:
  • termination payments, including superannuation, annual leave and long service leave;
  • redundancy or early retirement benefits;
  • overtime and shift payments;
  • loadings, allowances and deductions, which are calculated as a percentage of salary.
  1. In accordance with the Australian Tax Office rules, salary sacrificing arrangements must operate prospectively. No earnings may be sacrificed retrospectively. That is, there must be an arrangement to salary sacrifice before becoming entitled to be paid. Normally, the salary sacrificing arrangement would be entered into before the work is performed. To salary sacrifice future lump sum payments staff need to sign an authority to do so before being entitled to the money. See Authority to Pay a Lump Sum to Super before tax to register your intention to salary sacrifice future lump sum payments.
  2. Fixed dollar amounts only will be considered for salary sacrificing, with the exception of payments to UniSuper. Therefore, all applications for salary sacrificing should be expressed in fixed dollar amounts.
  3. All options are conditional upon the institution to which the pre-tax amount is paid accepting electronic transfer of funds.
  4. Individual staff members are responsible for any administrative costs and charges (i.e. tax and administration), which may be levied by the institution to which a pre-tax amount is paid.
  5. Salary sacrificing arrangements shall be maintained during periods of paid leave, therefore the staff member shall retain the reduced salary.
  6. Salary sacrificing arrangements may continue during periods of leave at reduced pay subject to sufficient funds being available. If not, then the staff member would have to suspend or reduce the salary sacrificing arrangement in order to take leave at reduced pay.
  7. Salary sacrificing arrangements will be suspended during periods of leave without pay.
  8. The University will be entitled to recover from the staff member any payment of salary and benefits paid in advance to which the staff member is not entitled.
  9. The University notes that the law and circumstances may change, and accepts no responsibility for any loss or disadvantage suffered by the staff member as a result of any salary sacrificing arrangement.
  10. If legislative or other changes result in increased cost to the University arising from any salary sacrificing arrangements, the University may elect to discontinue the arrangements unless the staff members agree to pay the additional cost, in which case the University may continue the option.
  11. Once salary sacrificing has commenced, the amount deducted from pre-tax salary will be shown as a pre-tax deduction on the staff member's pay advice.
  12. As salary sacrificing arrangements reduce the taxable income for the staff member, the gross salary shown on the payment summary will reflect the lower taxable salary.

Fees for salary sacrifice

  1. The University shall charge a fee to cover administrative costs for each salary sacrifice transaction, currently 50 cents per item per fortnight. Transactions attracting the administrative fee are:
  • pre-tax deductions to the UniSuper accounts
  • pre-tax deductions to on-campus child care centres
  • pre-tax deductions to ANU Parking Administration
  • pre-tax deductions to ANU Finance and Business Services (e.g. for laptop computers/PDAs)
  1. The fees are payable each fortnight and may increase over time consistent with ANU salary increases, tax increases (e.g. GST) or other economic adjustments as may be applied from time to time.

What can be salary packaged?

Benefit

Benefit administered by

Further info

Application form

Airline lounge memberships

ANU

Salary packaging airline lounge memberships

Airline Lounge Application form

Briefcase electronic diary and calculator

SmartSalary, nlc, and Selectus

Note: ANU offers a low fee service for packaging Electronic Diaries/Personal Digital Assistants (PDAs)

SmartSalary, nlc, and Selectus

(refer to Salary Packaging Guide)

SmartSalary, nlc, and Selectus

(refer to provider)

Cars - novated motor vehicle lease

SmartSalary, nlc, and Selectus

SmartSalary, nlc, and Selectus

(refer to Salary Packaging Guide)

SmartSalary, nlc, and Selectus

(refer to provider)

Childcare - fees for the provision of on campus childcare for the dependent children of staff

ANU

Parenting rooms and childcare

Childcare Application Form

(Please Note: Employees that salary package childcare fees are not eligible for Childcare benefit/tax rebate.)

Computer software

SmartSalary, nlc, and Selectus Note: ANU offers a low fee service for packaging work related software that is packaged in conjunction with a laptop

SmartSalary, nlc, and Selectus

(refer to Salary Packaging Guide)

SmartSalary, nlc, and Selectus

(refer to provider)

Income protection insurance

SmartSalary, nlc, and Selectus

SmartSalary, nlc, and Selectus

(refer to Salary Packaging Guide)

SmartSalary, nlc, and Selectus

(refer to provider)

Laptops and personal digital assistants (PDA's)

ANU

Laptop/PDA Information Sheet

Salary packaging – Laptop Benefit Declaration

Salary packaging a Laptop or PDA application form

Membership fees and subscriptions

SmartSalary, nlc, and Selectus

SmartSalary, nlc, and Selectus

(refer to Salary Packaging Guide)

SmartSalary, nlc, and Selectus

(refer to provider)

Newspapers and periodicals

SmartSalary, nlc, and Selectus

SmartSalary, nlc, and Selectus

(refer to Salary Packaging Guide)

SmartSalary, nlc, and Selectus

(refer to provider)

Parking - on campus parking fees

ANU

Parking Information Sheet

On-Campus Parking Options

Pre-tax parking fees can be applied for as part of your parking application

Salary packaging advice

SmartSalary, nlc, and Selectus

SmartSalary, nlc, and Selectus

(refer to Salary Packaging Guide)

SmartSalary, nlc, and Selectus

(refer to provider)

Self education expenses

SmartSalary, nlc, and Selectus

SmartSalary, nlc, and Selectus

(refer to Salary Packaging Guide)

SmartSalary, nlc, and Selectus

(refer to provider)

Superannuation - Unisuper

ANU

Unisuper information sheet

Mandatory contributions:
ANU Form - salary packaging (pre-tax) of mandatory Unisuper contributions

Voluntary Contributions:
ANU Form - Request for Payment of Voluntary (extra) Contributions

AND

Unisuper Form - regular voluntary contribution form

Lump sums (bonus/incentive payments):
Authority to pay a lump sum to superannuation before tax

Superannuation - other than Unisuper

SmartSalary, nlc, and Selectus

SmartSalary, nlc, and Selectus

(refer to Salary Packaging Guide)

SmartSalary, nlc, and Selectus

(refer to provider)

Work related equipment (tools of trade)

SmartSalary, nlc, and Selectus

SmartSalary, nlc, and Selectus

(refer to Salary Packaging Guide)

SmartSalary, nlc, and Selectus

(refer to provider)

Further Information

29. Please contact your HR Team if you require any further information.

Information

Printable version (PDF)
Title Salary sacrificing
Document Type Procedure
Document Number ANUP_000525
Version 14
Purpose To provide advice to eligible staff on the University's salary sacrificing arrangements.
Audience Staff
Category Administrative
Topic/ SubTopic Staff - Remuneration & Benefits
 
Effective Date 4 May 2016
Review Date 31 Dec 2017
 
Responsible Officer Director, Human Resources
Approved By: Executive Director, Administration and Planning
Contact Area Human Resources Division
Authority The Australian National University Enterprise Agreement 2013 - 2016
Income Tax Assessment Act 1997
Fringe Benefits Tax Assessment Act 1986