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WHAT IS SALARY SACRIFICE AGREEMENT AND HOW DOES IT HELP?

24
May

The salary sacrifice arrangement is a remuneration policy that allows the employees to sacrifice some part of their salary to receive a combination of income and benefit in a tax-effective manner. This is the agreement between the employer and employee and many organisations now offer salary sacrifice schemes.
Usually, the employer subtracts the tax from your salary before you get it.  And after that, you pay all your expenses.
However, with salary sacrifice arrangement, you get the same salary, but instead of paying all your expenses after you're taxed, you pay for selected expenses before you're taxed. If you accept the salary sacrifice, your overall payments will be lower and you have to pay less tax.
The benefits that are provided in the salary sacrifice arrangement are:

•  Company car fringe benefits; 
• Property fringe benefits; 
• Expense payment fringe benefits; 
• Living Away from home allowance fringe benefits;
• Car parking fringe benefits;
• Exempt benefits;
• Superannuation.