Salary Sacrifice Mortgage & Meals (Registered Charity).

Tried Googling but cant seem to find ay limits.

If you work for an eligible charity that offers mortgage & meals salary sacrifice, does anyone know the limits?

I think it's $2500 for meals (no idea how that works though), but is there a cap on how much you can sacrifice into your mortgage?

I'm aware it's only for PPOR and has to be paid direct to the mortgagee (if they accept salary sacrifice).

Thanks.

 

FBT

$5k for meals. Otherwise total cap depends on type of employer.

Also check with your broker on how servicing will be impacted.

 

Lenders will include this type of salary sacrifice as income, but they usually won't recognise that it's tax free. They'll also generally ask for additional confirmation that it's actually paid, but this is usually easily verified via some bank statements covering 3 or more payments.

 

I'm with Maxxia (NOT a recommendation) via health company. The limit for meals entertainment is $2650 for both health and charities. Unlike with the general living expenses limit which is much higher for charities than it is with health.

FAQ | Maxxia
mortgage and rent payments/living expenses (up to $9,010 for public not-for-profit health employees and $15,900 for charity employees) Meal Entertainment and venue hire (additional combined cap limit of $2,650 each FBT year).

I work for a Charity Organisation, how much can I Salary Package? | Maxxia

 

Thanks guys, I can let the cat out of the bag now. After being retrenched in June my partner secured a new job last night, contracts just signed. It's for a registered charity (hence the question). She's been told that they are whatever the "top catagory" type registration is so full packaging benefits will be available, offer letter states packaging will be made available as soon as practicable upon employment commencement.

I still don't follow that cap though @TwoDogs the link says "Cap of $15,900", but then says "Additionally" up to another $2650 in entertainment/meals etc. So is that an actual cap of $18,550, or is the link misleading and the $2650 is within the $15,900 cap?

Our plan would be to max out as much as we can on the PPOR mortgage, so hopefully the full $15,900 can go onto the mortgage.

Shes stoked, starts two weeks on Monday. I'll go update the retrenchment thread I started.

Cheers.

 

@Propagate they are two different allowances. The $15,900 can be used for expenses such as mortgage, rent, school fees, even credit cards. You just can't take it as cash. the easiest way to manage it IMO is to put it against your mortgage or rent then provide that substantiation annually (eg mortgage statement). You should be able to choose to put it into your mortgage account or your normal bank account, the key is the substantiation. eg, putting it into your offset account is OK as long as you can show that you have at least $15,900 in mortgage or rent (or whatever you choose to use as your substantiation) expenses.

The $2650 is much more limited in what it can be used for. Basically, meals, entertainment (but not at home entertainment, so you can't go spend it on groceries and say you're having a big shin dig at home), accommodation but not flights. You can probably handle this one of two ways (probably as there are a few different companies who run the program and they do it slightly differently). Either keep receipts then put in claims, this is easy enough if you'll burn the whole amount one a trip or two or three and want to use it to pay accommodation. The other way is to have it put in a weekly / fortnightly / monthly (depending on pay cycle) amount on to a credit card. Then you just use that card to pay for meals. A couple of traps here: the cards are restricted to particular credit card codes so if you eat out at a pub, for example, you probably won't be able to use it. Also they get a bit funny about accommodation packages if they include more than food & accommodation as you're not supposed to use it for tickets for example. You also are supposed to be entertaining, so you can't use it if you take yourself out for dinner but you can if there's at least 2 of you. hth

 

Thanks @serendip much appreciated. The $15,900 is easy enough then as we'll be requesting that that is paid direct to the bank into the mortgage account, and reduce the current payment accordingly. We'll soon use the entertainment allowance up on accommodation for weekends away.

Cheers.

 

You don't get it as a lump sum, rather your take home pay is increased as it takes that amount off your gross from my understanding. Similarly with the meal and entertainment allowance, you can claim with receipts or get a set amount taken out of your pay onto a card each pay period.

 

Yeah, I figured that it wouldn't be a lump, sorry, should have added that in my reply. I assumed it'd be divided by the pay period and done that way.

I assumed (but have NO idea), that Payroll would deduct the $15,900 form the annual salary, the balance salary then paid as normal and the $15,900 divided by the pay cycle and paid direct to the mortgage company?

Again though, I've no idea, so we'll find out in a few weeks when she starts.

I was more wondering what the caps were so I could get a better idea of the effect on net salary etc.

These Packaging Companies confuse me even more, no idea why they are needed? Doesn't Payroll just pay some pre tax, some post tax and direct the funds as required then your accountant sorts it out at year end?

Like I say, we'll find out soon enough.

Cheers.

 

The accountant wont have any involvement. The annual PAYG summary will show reportable fringe benefits based on the year ended 31 March. This value only impacts other issues such as centrelink, child care benefit, help debts and adjusted taxable income. Not income tax.

 

Packaging companies are a outsource resource. Its quite complex to manage some packaging and outsourcing is more efficient. The company pays them to manage it all. And they often impose a fee on the employee. Not all.

Some companies will credit the benefits in arrears, some qtly or periodically each pay period. They often credit to a debit card facility etc or use other mechanisms that avoid $$$ to bank accounts.

In the employee induction period someone will provide the run through. The SalSac firm also has a customer support team for the employee.

 

As someone who has been in management in various charities for the past 20 years, the packaging company means that five minutes before running payroll an employee isn't saying I can't salary sacrifice this week and I can focus on the business.

As Paul said there is complexity if the employee is to get the most benefit. The employer's role (indeed they are not licensed for it) is not to give financial advice. Out sourcing also protects privacy for the employee