Under a salary packaging arrangement, an employee agrees to forego part of their future entitlement to salary or wages in return for the employer providing them with benefits of a similar cost.

Offering salary packaging options is an effective way to attract and retain quality staff. In addition, approved not-for-profit (NFP) organisations are exempt from paying certain fringe benefit taxes, which allows them to boost salaries without extra costs, thereby increasing competitiveness with other employers. For NFP organisations with public benevolent institution (PBI) status, employees can package a proportion of their salary tax free, which provides them with considerable tax savings.

The administration of packaging these benefits can be challenging, which is why Community Sector Banking has come up with a solution to simplify the process. The salary sacrificed portion of the employee’s salary for fringe benefits goes onto Community Sector Banking’s ‘b-packaged’ debit MasterCard card, while the balance goes into the employee’s ‘b-optimised’ account for everyday access.

This solution helps employers to reward and retain staff, and makes administrative obligations such as managing tax requirements and tracking spending much easier. For employees, the solution means having a widely accepted MasterCard to make payments on as part of their allowable benefits. It can also be used to make periodical payments or direct debits including loans, and account activity can be viewed online or via monthly statements.