The Department of the Senate is responsible for paying salaries to Senators while the Department of the House of Representatives is responsible for paying salaries to Members.
Each Senator and Member receives an annual base salary, which is determined by the Remuneration Tribunal.1
The salary of a Senator or Member is paid monthly in arrears.
Deductions from Salary for Income Tax
The salary of a Senator or Member is subject to ‘Pay as You Go’ (PAYG) tax withholding.2 The amount of PAYG withheld may vary depending on individual circumstances.
Deductions from Salary for Superannuation
Contributions to the current superannuation accumulation arrangements or the Parliamentary Contributory Superannuation Scheme (PCSS) are deducted from a Senator or Member’s salary.
Benefits provided to Senators and Members in the form of fringe benefits are subject to Fringe Benefits Tax (FBT) which is payable by Ministerial and Parliamentary Services.3 The FBT year ends on 31 March with the FBT rate set at 49 per cent of the grossed up value of benefits provided.4 A benefit that is a fringe benefit is exempt from income tax.5
Examples of fringe benefits include:
- the provision of car transport where the car is used or made available for private purposes6
- the provision of free telephone services where there is a percentage of private use7
- the provision of spouse and dependant travel8
- the provision of Post Retirement Travel and Life Gold Pass holder travel.9
Reportable Fringe Benefits
Ministerial and Parliamentary Services provides the House Departments with the grossed-up value of fringe benefits provided to Senators and Members by Ministerial and Parliamentary Services during the FBT year. If the total taxable value of fringe benefits received exceeds the $2,000 threshold, the amount will appear on payment summaries.10 The House Departments are responsible for issuing payment summaries.
There is no income tax paid by the Senator or Member on reportable fringe benefits. However, the reportable fringe benefit amount is added to assessable income and used to calculate a Senator or Member’s liability or eligibility to various surcharges, income tax deductions and other obligations such as:
- Medicare levy surcharge11
- income tax deduction for personal superannuation contributions12
- superannuation co-contribution13
- tax offset for contributions to spouse superannuation14
- superannuation contributions and termination payments surcharge15
- compulsory Higher Education Loan Program (HELP) repayments and SFSS (Student Financial Supplement Scheme)16
- child support obligations17
- certain income-tested government benefits.
1 Clause 2.1 of Remuneration Tribunal Determination 2016/16: Members of Parliament - Base Salary, Additional Salary for Parliamentary Office Holders, and Related Matters
2 See section 12-45 of Schedule 1 to the Taxation Administration Act 1953.
3 'Office-holders’ are ‘employees’ for the purposes of FBT legislation and the responsible Department treated as if it were a legal person (the employer) for these purposes. See section 66 of the Fringe Benefits Tax Assessment Act 1986 and section 4 of the Fringe Benefits Tax (Application to the Commonwealth) Act 1986.
4 See section 136(1) of the Fringe Benefits Tax Assessment Act 1986 and section 6 of the Fringe Benefits Tax Act 1986.
5 Section 23L of the Income Tax Assessment Act 1936.
6 Section 7 of the Fringe Benefits Tax Assessment Act 1986.
7 Section 20 of the Fringe Benefits Tax Assessment Act 1986.
8 Sections 45 and 148 of the Fringe Benefits Tax Assessment Act 1986.
9 Section 45 of the Fringe Benefits Tax Assessment Act 1986
10 Sections 135M‑135Q of the Fringe Benefits Tax Assessment Act 1986.
11 See A New Tax System (Medicare Levy Surcharge - Fringe Benefits) Act 1999.
12 Section 290-160 of the Income Tax Assessment Act 1997.
13 Section 8(1) of the Superannuation (Government Contribution for Low Income Earners) Act 2003.
14 Section 290-230 of the Income Tax Assessment Act 1997.
15 See Superannuation Contributions Tax (Assessment and Collection) Act 1997 and the Termination Payments Tax (Assessment and Collection) Act 1997.
16 Section 154-5 of the Higher Education Support Act 2003.
17 Section 43 of the Child Support (Assessment) Act 1989.