Does your organisation need a new salary packaging provider?

What if we told you that your team could increase their income without working longer hours?

We understand that not for profits can struggle to attract and retain staff. Our work and objectives are certainly rewarding, but we cannot always offer the same salaries as the for profit sector. Salary packaging helps organisations to offer more competitive remuneration, creating more attractive roles for skilled employees. The stronger your workforce, the stronger your impact.

Salary packaging allows your team to purchase a variety of goods and services, as well as pay bills, rent, or mortgages with tax-free dollars. This reduces income tax, which results in increased take-home pay.

After starting salary packaging, not for profits see improved employee satisfaction. In fact, having the option to salary package plays a significant role in onboarding and retention: 85% of our surveyed customers strongly agreed or agreed that they were more likely to stay with their current employer, while 81% were persuaded to accept their current roles because their employer offered salary packaging.

We can assist you throughout your recruitment process to ensure you put the best possible offer forward, which could mean the difference between losing and securing your ideal candidate. See for yourself – our salary packaging calculator tool shows how take home salaries can be improved. You may think that it sounds too good to be true, but salary packaging is approved by the Australian Tax Office (ATO). Essentially, it’s an incentive for not for profits to continue the important philanthropic work that supports the community.

It is important to note that not all organisations are eligible to salary package. Please read the following section titled “Can my organisation offer salary packaging?”

By now, you may have some questions. Here are some of the most common ones we get asked when introducing an organisation to salary packaging:

Does it cost my organisation to salary package?

Public Benevolent Institutions and Health Promotion Charities are exempt from Fringe Benefits Tax (FBT). This means they don’t have to pay tax on the fringe benefits they provide to employees.

In fact, organisations that salary package with CBB see no negative impact on their bottom line. There are two key reasons for this: first, we manage the whole process for you, negating the need to assign the work to an internal resource and freeing up time for other projects that deliver a greater social impact. Second, our fees are deducted from employees’ salary packaging payments, but they comprise only a tiny portion of their increased take-home income. By salary packaging with CBB, your organisation and its employees can both become financially better off.

How much can my employees save?

An individual can salary package a maximum of $15,899 each FBT year, but their additional take home pay will depend on their annual salary. This table shows the indicative financial benefits for different salaries; you can also use our salary packaging calculator.

How does salary packaging affect my organisation’s FBT requirements?

Salary packaging follows the Fringe Benefits Tax (FBT) year, which commences on 1 April and ends on 31 March every year.

At the end of each FBT year, we recommend that salary packaging customers have a zero balance left over. CBB regularly communicates with customers in the lead up to 31 March to ensure everyone accesses their full entitlements, avoiding last-minute stress.

There are two options for unspent funds at the end of FBT year. They can be rolled over into the next FBT period, but this will reduce the amount that can be packaged in the following year. Otherwise, your organisation can return the funds, in which case they will be taxed.

How does salary packaging fit into my organisation’s operations?

Our Operations team work closely with your Payroll team to define expectations and set up the process in accordance with internal needs. Once it’s set up, minimal administrative input is required on your end. From here, individuals can make any changes to their salary packaging plans through our Customer Care Team. Your organisation will have periodical FBT and GST reporting obligations, but we provide the required information in a timely manner.

Charities with Public Benevolent Institution (PBI) or Health Promotion Charity (HPC) status are eligible to salary package.

When your charity is registered with the Australian Charities and Not-for-profits Commission (ACNC), the ACNC will register your charity with at least one ‘subtype’ that reflects your charitable purpose. Charities with the PBI and/or HPC subtype are eligible to receive an exemption for fringe benefits tax (FBT) which provides their employees with benefits including salary packaging.

We recommend that organisations seeking to change their charity subtype review the information available from the ACNC website or access professional advice.

In order to register as a PBI or HPC, your organisation must:

• • Meet the legal definition of a charity.
  • Be an institution – for example, you must be an organisation or association that delivers your own activities, engages others to deliver activities on your behalf or delivers activities in partnership with others, and have clear plans for doing so; and
  • Satisfy other criteria as described below.

Public Benevolent Institution (PBI) status

The ACNC defines a PBI as “a charitable institution whose main purpose is to relieve poverty or distress”.

In order to register as a PBI, in addition to the criteria above, your organisation must:

• • Have a main purpose of benevolent relief, such as working to relieve poverty or distress. The need(s) you are trying to relieve must be more serious than the needs encountered in ordinary human experience, and significant enough that the need(s) would arouse compassion from people within the community. In addition:
    • • The relief you provide must actually relieve the relevant need(s);
      • Your activities are focused on relieving the poverty or distress of people in need and that you have clear mechanisms in place for delivering the benevolent relief through a relationship of collaboration;
      • Your constitution describes your organisation’s purpose or objective, so it is a key source used by the ACNC to determine your eligibility for registration as a PBI, however, the ACNC will consider other factors when making their decision.

Health Promotion Charity (HPC) status

The ACNC defines a HPC as “a charitable institution whose principal activity is to promote the prevention or the control of diseases in human beings”.

In order to register as an HPC, in addition to the criteria above:

• • Your principal activity must be to promote the prevention or control of diseases in human beings; and
  • You must actively promote the prevention or control (or both) of disease in human beings. Working to improve general health or wellbeing is not sufficient.

The ACNC’s definition of disease covers both physical and mental illnesses. There are specific requirements relating to the definition of disease on the ACNC website.

Applying for PBI or HPC status

Before applying for PBI or HPC status, we recommend reviewing the ACNC guidance on the subtype you’re applying for and checking this against your constitution and activities. You may need to amend your constitution and business plan to demonstrate that you are a PBI or HPC.

If you believe that your organisation qualifies as a PBI or HPC, you can apply via an online form on the ACNC Charity Portal. Qualifying as a PBI or HPC gives you access to ATO tax concessions, this is referred to as obtaining endorsements.

If you need assistance, we refer clients to Prolegis Lawyers, a specialist law firm that advises charities and other not for profits exclusively on their legal issues, including establishment, applying for registration as a charity and obtaining endorsements for tax concessions, including endorsement as a PBI or HPC. Prolegis Lawyers can work with you to review your eligibility to obtain endorsement as a PBI or HPC, advise you on your options for doing so and assist you to undertake the necessary legal and regulatory processes.

Start salary packaging with CBB

Once the ACNC approves your application for registration as a PBI or HPC, the ATO will endorse your organisation with the relevant category (PBI or HPC). Achieving PBI or HPC status then allows your organisation to offer salary packaging to your staff.

Call us on 1300 763 505 to speak with one of our friendly Relationship Managers about how your organisation can benefit from salary packaging with CBB including additional benefits like:

• Tax-free meals, holiday accommodation and venue hire.
• Discounted retail and entertainment options through our CBB Rewards Club.
• Novated motor vehicle leasing.
• Electronic device packaging.
• Discounted airline lounge memberships.
• Special offers and discounts through our partners.
• An Adelaide-based Customer Care Team providing fast and friendly service for all enquiries; and
• The ability for your employees to make changes to their salary packaging account at no extra cost.

Not for profits work incredibly hard to create impact and change for their communities. However, this means that salary packaging is not part of their core business. For this reason, many organisations choose to engage a salary packaging provider to take care of the entire process and enjoy a range of time and money saving benefits.

Leave it to the experts

Salary packaging comes with regulations and laws that inevitably change from time to time. The team at CBB are the experts, so we ensure our client organisations are compliant with ATO requirements. Plus, we let you know if there is anything you can address to improve compliance. It’s just one less thing to worry about.

It’s free for your organisation

Our salary packaging account management fees are very competitive. Fees are passed onto the employee but comprise only a tiny portion of their increased take-home income. This means it won’t detract from your organisation’s bottom line. Plus, if you have previously managed salary packaging internally, you can save on resourcing costs by engaging a provider.

Reduce resourcing pressures

Your salary packaging provider manages the entire salary packaging process, so your organisation doesn’t need to allocate an in-house resource. In other words, it’s one less thing for your team to worry about. Additionally, a provider will send you reports to support your FBT and GST reporting obligations.

There is more to salary packaging than extra income. You can also provide your team with fantastic benefits that provide access to additional financial resources and enhance overall wellbeing. What sets us apart is our holistic approach to customer experience; we take care of everything behind the scenes, reducing the pressure on your hard-working team, leaving them free to enjoy the benefits of salary packaging.

Increase your team’s take-home pay by up to 12%

You read that right; salary packaging increases your team’s take-home pay by 6-12%. Simply put, your team can use their salaries to purchase goods and services, pay bills (such as their credit card), and take care of rent or mortgage payments before their wage is taxed. This reduces income tax and boosts their take-home pay, bringing their salaries more in line with those in the private sector.

Meal entertainment and holiday accommodation

Enough about bills; give your team even more tax-free income to support them to enjoy life outside of work. The meal entertainment and holiday accommodation (MEHA) benefit provides an additional $2,650 on top of their yearly salary packaging amount to use on food, beverage and accommodation when dining out, on holiday, or even for special occasions.

Exclusive discounts and offers with CBB Rewards Club

Salary packaging customers can join the CBB Rewards Club for free. With exclusive offers for products and services across Australia, it’s a great way to support wellbeing. Members get exclusive discounts and offers on groceries, fuel, dining, movie vouchers, event tickets, gift cards, fitness and lifestyle, and up to 80% off online shopping, including clothing, homewares and technology.

Cover car repayments with novated leasing

Your team lead busy lives, so adding vehicle problems into the mix can affect stress levels and punctuality. By offering novated leasing, you could save them thousands in acquisition and running costs for the new or demo vehicle of their choice. Better yet, this benefit is on top of their standard salary packaging amount.

Boost productivity and connectivity with electronic device packaging

Nowadays, technology is an integral component of a productive workplace. Your team can package portable electronic devices if they are used primarily for work-related purposes. Having the latest technology can boost productivity and enhance connectivity with colleagues, no matter where your team are working.

Recharge with an airline lounge membership

Travelling can be exhausting; that’s why our airline lounge membership is a great benefit for your team members that fly to do business. The membership will help your team to make the most of their travel time and turn up to meetings refreshed, maximising the outcomes of their travel.

Support the costs of living with the remote area benefit

Not for profits in regional and remote areas face unique challenges when it comes to attracting and retaining staff. If your team members live and work in a remote community, they may be able to access the remote area benefit; this allows them to claim up to 50% of their rent payments, mortgage interest, household fuel expenses, and some travel costs. Eligibility criteria applies.

More offers and discounts from our partners

We are fortunate to have partnerships with organisations that share our integrity and values, ensuring you won’t compromise on yours. We work with Beyond Bank, Medibank, EMA Consulting, and others to help your team stretch their income even further.

Personalised service regardless of your location

Our Adelaide-based Customer Care team is committed to providing fast, personalised service, ensuring we resolve any questions or concerns as soon as possible. We also have a dedicated Relationship team based all over Australia. They work with your team to ensure everyone understands their options and can receive their full entitlements.

Flexibility at no extra cost

We don’t have any hidden charges; what you see is what you get. For example, suppose a member of your team decides to add new benefits to their salary packaging account with us. In that case, they won’t incur any administration fees for making these changes. To support flexibility, you can tailor a package from the above benefits to suit your organisation. You can even limit certain products to specific people or departments.