Here’s an example of how it works for Sue – a charity worker who earns $45,000 a year.

Before she started salary packaging, Sue received her pay after tax had been deducted and used her hard-earned money to pay her bills and purchase everyday items like groceries and petrol.

With salary packaging, Sue chooses to have some of her money paid to an Everyday Purchases card before she is taxed. She still has access to this money; the only difference is that it’s added to a card which she can use for everyday expenses such as groceries, shopping and petrol (wherever Visa is accepted).

If she doesn’t spend all the money on her card each fortnight, it will continue to build up until she needs it. The only tax requirement is that she uses the entire balance by 31 March each year.

Sue will receive over $4,400 extra a year with salary packaging! Even with the administration fee Sue pays for salary packaging, she will still have well over $4,000 extra to spend each year.