Salary Sacrifice - Australian Customs Service

UNCLASSIFIED
Employees should allow 2- 3 weeks for the set up of new applications as
COMPASS and QSP coding is required to facilitate any new salary sacrifice
arrangement.
8. Superannuation policy and process
8.1 The following sets out the parameters within which employees may participate in a
salary sacrifice arrangement for superannuation:
the superannuation fund must be approved under the Australian Prudential
Regulatory Authority (APRA);
Customs and Border Protection must be able to make payments to the fund by
an appropriate financial facility (as determined by Customs and Border
Protection), and
the contribution rate may only be changed annually on the anniversary of the
commencement of the deduction. If an employee wishes to change the
contribution rate prior to this date, the application must be approved by the
Director, NPAC.
8.2 Additionally, non-ongoing irregular and intermittent employees can elect to salary
sacrifice to a superannuation fund provided:
• The superannuation fund of choice is an accumulation fund and not a defined
benefit fund; and
• The nominated amount is defined by percentage and is not a dollar amount.
8.3 Superannuation salary sacrifice deductions will contribute towards the
Superannuation Concessional Contributions Cap.
9. Salary Sacrifice and Fringe Benefits Tax (FBT)
9.1 FBT is a tax on the employer not the employee. Any FBT payable in relation to salary
sacrifice arrangement (this includes executive vehicles) is recovered from the
employee. The FBT paid by Customs and Border Protection in relation to other
benefits provided is not recovered from employees.
9.2 When an employee makes an after tax contribution to the cost of the benefit provided
by the employer, this contribution reduces the taxable value of the benefit.
9.3 For example, when an employee who has a car as part of their salary package
makes an after tax contribution to the running costs of the car, the amount
contributed is treated as an employee contribution and reduces the taxable value of
the benefit. Customs and Border Protection employees may be required to make
after tax contributions for cars.
9.4 If an employee enters a salary sacrifice arrangement to obtain a fringe benefit as part
of their overall remuneration package, the amount sacrificed from their pre tax
earnings is not treated as an employee contribution. Employee contributions can only
be made from the after tax income of an employee.
9.5 Where the after tax contributions made by the employee are not sufficient to reduce
the FBT payable to $nil, any FBT paid by Customs and Border Protection will be
recovered from the employee.
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