Attracting and retaining staff is vital to a business’ success and a comprehensive employee benefits program plays an important role in achieving this. But is it better to manage this in-house, or outsource it?
Offering a suite of employee benefits can help an organisation attract and retain key staff. But managing benefits programs in-house can be complex and onerous. Understanding tax and compliance issues, ensuring timely transactions and responding to employees’ queries can detract from an organisation’s core mission.
There are also significant risks in managing employee benefits in-house.
There are tax and compliance risks, particularly related to Fringe Benefits Tax. Administering salary packaging is also tricky because they both require accurate and timely processing of employee pay for each period. For example, it important that mortgages are paid on time so having robust and proven processes and systems in place is crucial.
But well-run outsourced benefits program can be a solution to these issues. And offering salary packaging, also known as salary sacrificing, is something every employer should consider.
When employees accept a salary package, they swap a portion of their regular pay for other workplace benefits and they don’t have to pay tax on the income they spend on those chosen benefits. In short, they increase their benefits at no cost to their employer.
One of the most popular ways of using salary packaging is to make additional superannuation contributions – topping up the compulsory superannuation payments an employer makes.
Employees may also be able to salary package the cost of items such as stationery, a leased or rented computer, a filing cabinet, fax machine or other business equipment if you work from home or have a home office. Interest-only payments on investment loans with recognised financial institutions, financial advice fees, loss of earnings insurance and remote area housing benefits also can be salary packaged.
People working in the public health or not-for-profit sector may also be entitled to salary package an even greater range of benefits, such as rent or mortgage up to a cap limit or meal entertainment expenses.
Looking for more information? RemServ is Queensland’s leading provider of salary packaging services and provides specialist expertise and exceptional customer service across a comprehensive suite of workplace benefits, including salary packaging, novated leasing and fleet management.
– Mike Salisbury is the managing director of RemServ.