Are you using your pay to its full potential?
Learn about how salary sacrifice can benefit you!
Do you use multiple tech devices for your work? Smart phone, tablet, laptop? It’s time to consider salary sacrifice to save you money and reduce your taxable income.
Portable assets are regarded as Fringe Benefits Tax exempt items if the primary use is more than 50 per cent related to your work.
Salary Sacrificing can benefit you by giving you the opportunity to claim the cost of a portable asset (such as a laptop, tablet or phone) in a single financial year from pre-tax earnings, rather than depreciation on your tax return over multiple years and apportioning for private usage. Additionally, Bookssorted rebates the Goods and Services Tax (GST) back to you.
Personal Use
But what about my personal use? You can salary sacrifice an item if, in the first instance, the device is primarily used to assist or enable you to do your job. Personal use is treated as incidental if this criteria is met.
The ATO sees primary use as being for a function (or functions) listed in your job description, duty statement or employment contract; as well as the type of work you do and the policies your organisation has around the device.
For example, if you work for company that has a ‘Bring-Your-Own-Device’ policy for mobile phones and you use your phone primarily to monitor emails and make work related phone calls, you could salary sacrifice your phone and gain an FBT exempt benefit.
If you are working in an organisation that has policies where you must use the organisations computers only, e.g. due to classified work requirements, you could not claim the purchase of a laptop, as the item could not be used in your position.
You could claim your laptop if you are working in an organisation that allows you to use your own laptop, and even encourages it to allow you to use specialist software. You should ensure, in this case, that your personal usage is incidental.
How many devices?
You can only claim one portable device per FBT year (beginning 1 April each year), so it is best to time your device purchases. However, if you need to buy two or more devices in the one year, it is best to redeem your higher purchase through a salary sacrifice agreement, and claim the lower cost device/s on your tax return. You could also purchase one item at the end of the FBT year (late March) and another item early in the following FBT year (early April). If you’ve already claimed your portable asset, you cannot change which asset is claimed at the end of the FBT year, so be sure to plan ahead.
In addition to portable devices, you can also salary sacrifice a variety of other items relevant to your work. Protective clothing, briefcases and handbags (laptop bags), membership fees and subscriptions can all be salary sacrificed where they enable you to do your job. In these cases, multiple claims can be put through, as long as they are all relevant to your work and don’t duplicate a specific item claimed in the same year.
To find out more about your salary sacrifice options, chat with us on 02 6145 2698 or or get in touch here