Can you elaborate on how it will affect centrelink? Should I specify to them total income before salary sacrificing or should I break it down into taxed and untaxed income?
Registered User
Re: salary sacrificing
Can you elaborate on how it will affect centrelink? Should I specify to them total income before salary sacrificing or should I break it down into taxed and untaxed income?
Moderator
Basically your taxable income is different to your reportable income. If your income is $50k and you sacrifice $15k your taxable income is $35k. However, your reportable income is approx $65k (they gross up the sacrificed amount). My understanding is CL use the reportable income figure to work out entitlements for FTB and CC.
HECS also uses the reportable income figure.
Registered User
I'm not sure whether it's prorated or not sorry.
It affects your centrelink because you're getting paid in pre tax dollars (and ie getting the benefit of not paying tax on those dollars) and they need to "gross it up" for the purpose of determining your real income for centrelink purposes.
I'm not actually sure what the process is for notifying centrelink as I don't see that side of it, but they will need to know the full amount of your pay. Your group certificate/payment summary will show the grossed up fringe benefits
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