Salary Sacrifice

[Davmar]

I am looking at taking out Private Health Insurance and trying to salary sacrifice.

I am employed at DET (primary school teacher) and i asked my boss today and she notified me that they cannot salary sacrifice Private Health Insurance.

I cannot find this information anywhere except for VIC, etc.

I am located in Sydney

Does anyone have any experience or knowledge of this?

 

[nww]

Can you actually salary sacrifice health insurance , if you could it most likely
would only be the work component.

 

[coastymike]

A lot of educational institutions dont allow salary packaging of mortgages or credit cards or health insurance as these benefit items such as mortgage and health insurance payments are notexempt from FBT, nor are they concessionally taxed.

If packaged these payments are fully taxed, which means that they incur FBT at 46.5% (equal tothe highest marginal tax rate plus the Medicare levy). The result is that salary packaging these items would not benefit Department employees. Different if the institution is a public benevolent institution or charitable organisation.

 

[Davmar]

Bummer

Thanks for the information people!!

 

[Paul@PFI]

You can salary sacrifice health insurance. Its just there is no tax benefit in such a minor matter for most employees / employers.

Mike raises a relevant point BUT this overlooks the rebate available to some employers to lower the cost of FBT. Schools don't pay tax and are one such example. The rebate reflects that they cant claim a deduction.

Salary sacrifice for teachers has changed in recent years. Prior to Gillard Swan a few years ago you could SalSac school fees for your kids etc and it was concessionally taxed so the FBT was very low and then reduced by a rebate. Now the benefits are marginal at best. The rate of FBT now applies to 100% of the benefit BUT the rebate is factored in so instead of the benefit being taxed at 49% its a bit lower...Slightly lower than her marginal tax rate. We sal sac our last kids fees but do we save much ?? No. But we benefit from instalments over the full year rather than by the term.