Terms and Conditions for Salary Packaging the Purchase of a Portable Electronic Device #
- Staff interested in purchasing a device for their own use may find it advantageous to do so through the College payroll system.
- Staff are responsible for selecting their own device and software, which would be the property of the staff member, and staff members are responsible for the purchase, installation of software, and any repairs and maintenance.
- Staff members are responsible for insuring all devices, as these are not covered under the College’s insurance policy.
- Staff may pay for the device in one or two payments within a month of purchase, or they may opt for repayments to be deducted from salary over 26 fortnights (or less, by agreement with the Finance Manager). See the example below for how payments are spread over 26 fortnights.
- There is currently a Fringe Benefits Tax exemption available where devices are used primarily for work. If a staff member declares that the device is primarily for work use, payments are dedicated from salary before tax. This exemption applies to one similar device per Fringe Benefits Tax year. The maximum amount which may be packaged is $2,500. Pre-loaded software may be included, but not if purchased separately.
- Portable printers may also be purchased and packaged.
- Salary packaging does not cover the cost of extended warranties or external modems.
- If the tax legislation changes, the staff member becomes liable to pay any Fringe Benefits Tax payable under the changed rules.
- It is recommended that staff obtain professional financial advice when making decisions relating to salary and tax planning. The Association is not licensed to provide financial advice.
- Contact the Finance Manager at the Business Office if you require any further information on salary packaging of a device.
Example of Payments Spread Over 26 Fortnights Pre-Tax #
- Retail cost of laptop: $2,000
- Interest rate: 0%
- Fortnightly repayment: $77 ($2,000/26 fortnights)
- Possible tax saving: $900 (at top marginal tax rate 45%)
- Net cost: $1,100
The above is an example only. It is recommended that staff seek financial advice from a licensed practitioner. Savings available where staff package a device from pre-tax salary.