Salary packaging is an arrangement where the employee forgoes a part of their salary in return for a benefit of a similar nature. The employee’s cash salary is reduced or ‘sacrificed’ by the cost of the benefit and any associated tax and administrative costs.
For further details on salary packaging, read the salary packaging guideline.
We strongly recommend seeking financial advice from a licensed professional to determine if it is right for you before entering a salary packaging arrangement. The Department of Finance is unable to provide financial advice or advice in relation to your tax arrangements.
Smart administers salary packaging services for MOP(S) Act employees.
Finance also administers an in-house 'fee-free' salary sacrifice arrangement for superannuation purposes only for eligible employees whose superannuation contributions are paid into a ‘complying superannuation fund’.
Eligibility for salary packaging
Ongoing MOP(S) Act employees may access salary packaging arrangements for items listed in the benefits profile on the Smart website.
Non-ongoing employees whose employment agreement is for a period of three months or longer, may only salary package additional employer superannuation contributions.
Other non-ongoing employees and casual employees do not have access to salary packaging.
Salary packaging items
Commonly salary packaged items include:
- motor vehicles
- portable electronic devices such as notebooks, laptops or tablets, portable printers, mobile phones and navigation systems
- airline lounge memberships
- additional employer superannuation contributions (these can be made to the Public Sector Superannuation accumulation plan (PSSap) but not to the Commonwealth Superannuation Scheme (CSS) or the Public Sector Superannuation Scheme (PSS)).
Items that attract the full rate of Fringe Benefit Tax (FBT) may not be included in salary packaging. Examples of such items are mortgage repayments, non-work-based childcare and desktop computers.
How to access salary packaging through Smart
Please ensure you read the salary packing guideline (see related resources) and get advice from a financial professional before accessing salary packaging.
To access salary packaging, you will need to contact Smart and enter your employer as ‘Members of Parliament Staff’.
You will also need to complete a Salary Packaging Deed. Copies of the Deed and other relevant documents can be obtained by contacting Smart.
The purpose of the Deed is to indemnify the Department of Finance from any liabilities it may incur by allowing the employee to salary package. A representative from the Department will sign the deed on behalf of the Commonwealth.
Employees must complete and sign all relevant forms then forward them to the Department of Finance at Mailbox-MOPSSalaryPackaging@finance.gov.au. The Department will then forward the signed documents to Smart.
Employees should keep the original of the Deed for their own records.
Salary sacrificing additional superannuation payments through Finance
To access this arrangement employees must complete the Sacrifice Agreement for Finance Administered Additional Superannuation Form (the Agreement).
By signing the Agreement, employees are declaring they understand the arrangements outlined in the Agreement and that they are entering into these arrangements voluntarily. Employees will be asked to confirm whether they have chosen to seek financial advice prior to arranging or making changes to an existing arrangement.
Completed Agreements must be submitted to Mailbox-MOPSSalaryPackaging@finance.gov.au for approval.
Finance will aim to process completed agreements in accordance with the payroll dates published here: https://maps.finance.gov.au/pay-and-employment/pay-cut-dates.
Changes to contribution rates can only be made twice in any financial year.
Complying superannuation funds
Employees may salary sacrifice additional superannuation contributions to a complying superannuation fund. A complying superannuation fund must be registered and comply with the requirements of the Australian Prudential Regulatory Authority and the Australian Taxation Office.
Employees are responsible for ceasing or changing their arrangements with Smart, not Finance.
I am currently salary sacrificing superannuation with Smart, but want to switch to the ‘in house’ fee free arrangement administered by Finance, what do I need to do?
(a) You must first cease your payroll deductions for superannuation with Smart. Smart requests that you lodge your cessation request at least 10 business days in advance as this cease request tells Smart to stop payroll deductions. To do this:
- Login to your account at https://www.smart.com.au
- Click 'My Benefits' from the menu and select 'Cease benefits'
- Select either 'Specific benefits' or 'All benefits'
- Nominate your cease date and update your contact details as necessary
- Select ‘Submit’, review the Employee Declaration and select ‘Accept’
(b) Once your cease request has been processed in full, Smart will send you a confirmation email. MOPS Pay and Conditions will also receive advice from Smart to cease your superannuation deduction.
(c) Once you have received the confirmation email from Smart, you need to complete the Salary Sacrifice Agreement for Finance Administered Additional Superannuation Form and send this to Mailbox-MOPSSalaryPackaging@finance.gov.au. You should only submit the Agreement for processing once you have received confirmation from Smart that they have ceased your deductions. Otherwise, you may have a period where two salary sacrifice deductions are made from your pay (one via your Smart agreement and one via your Finance agreement).
How long will this take?
As set out above, you should allow at least 10 business days to cease your payroll deductions with Smart. In addition, it will take 1-2 pay periods for Finance to process any new completed agreements. You should allow 6-8 weeks for this process.