2.0 Taxation Issues

2.1 Australian Taxation Office Criteria

Salary Packaging arrangements between the University and eligible employees are acceptable to the Australian Taxation Office (ATO) provided that the arrangements comply with certain criteria.

Two of those criteria are:

1. Salary Packaging arrangements relate to remuneration for future services provided by employees ie prospective employment. Salary and other income already earned can not be packaged retrospectively.
2. Employees cannot instruct their employer on how they are to be paid. Thus, the University, whilst considering employees' wishes, will always decide the Salary and Benefits to be provided to employees.

2.2 Fringe Benefits Tax (FBT)

FBT is a tax payable by the University on the Motor Vehicle Benefit and in some situations on Remote Area Housing provided to employees. It should be noted that the FBT payable on this Benefit is concessional.

The FBT year commences on April 1 and ceases on March 31.

The FBT rate is currently 48.5% and is payable on the grossed-up taxable value of Benefits provided. The gross up rate as at July 1, 2000 is 2.129189.

2.3 Reportable Fringe Benefits (RFB's)

Reportable Fringe Benefits are Benefits that have a taxable value in excess of $1,000 and will appear on an employee's Group Certificate at the grossed up taxable value. RFB's will be used to determine an individual's:

1. Liability for:
• Medicare Levy Surcharge
• Superannuation Contributions Surcharge
• Child Support obligations
• H.E.C.S repayments
• Terminations Payments Surcharge
2. Eligibility for:
• Tax deductions for spouse superannuation, low income rebate
• Tax initiatives such as Family Allowance, the Child Care Rebate etc.

RFB's do not include those Fringe Benefits that are exempt, "otherwise deductible" or are specifically excluded.

RFB's provided during the FBT Year ending March 31 will appear on group certificates for the Financial Year ending June 30.

2.4 Goods and Services Tax (GST)

GST is a tax on the supply of goods and services. The current rate of the GST is 10%. All Benefits provided and fees incurred under the Program are either GST free or will receive an "input tax credit". This credit will be passed on to employees, so in effect, employees will be reimbursed for any GST component on the Benefits and Fees.

The only current exception being Third Party Insurance included in Motor Vehicle Registration.