WHY SO MANY NOT-FOR-PROFITS (NFPs) CHOOSE SALARY PACKAGING TO PAY THEIR EMPLOYEES

As an NFP organisation, getting funding to cover your everyday expenses while servicing your clients, can sometimes seem like an uphill battle where every penny counts. And employee wages, as well as enticing high quality personnel, can throw another spanner in the budgeting mix. So why wouldn’t you take advantage of salary packaging options to pay your employees?

Offering salary packaging gives you more options when enticing staff who might command a high salary in the private sector. With salary packaging, your NFP organisation is on a more level playing field; when the organisation offers competitive salary packages, the employee can save money on their tax, which results in the same (or higher) net value on their wages. It’s a win-win situation.

So, what is Salary Packaging?

Also called

But why is this more popular in the NFP sector? Because NFP organisations may be entitled to a Fringe Benefits Tax (FBT) rebate, or even an exemption. In the ‘for profit’ sector, the cost of FBT can sometimes make salary sacrificing prohibitively expensive.

With this in mind, NFPs have the opportunity to attract and retain highly qualified employees by offering competitive salary packaging.

Salary packaging, for the employee, is a great way of ensuring some of their regular household costs are paid automatically, and in turn can boost employee morale by offering valuable benefits, showing they are valued and appreciated.

NFPs have a broad range of regular fixed expenses that can be paid through salary sacrificing, such as;

car payments

car parking

rent

mortgage repayments

school fees

loan or credit card repayments

….and many more