What is Salary Packaging?

“Salary Packaging” or “Salary Sacrificing” involves an arrangement between an Employer and an Employee whereby the employee contractually agrees to forego (sacrifice) part of their future entitlements to salary, in return for the Employer providing certain non-cash benefits. Salary Packaging allows employees to reduce their taxable income by paying for certain everyday expenses using tax-free dollars. This may result in tax savings, higher take-home pay, and access to additional benefits.