Rising costs in cities, together with an increase in people WFH due to the pandemic is driving more Australians to leave urban areas for regional towns. Discover how employees taking part in this trend can take advantage of potential tax savings from extra salary-packaged benefits.
Regional areas have never been more popular with Australians. In fact, there was net movement of 43,000 Australians from capital cities to regional areas during 2020, the largest change since data was first reported in 20011. For HR teams with a workforce on the move, this means making sure employees have access to the full suite of benefits they’re entitled to.
What’s driving regional migration?
The sharp rise in employees WFH since the pandemic began has been a trigger for many to look outside of city hubs for a place to call home. With lockdowns limiting access to local attractions and amenities and no commute time to worry about, city dwellers have less reason to stay put. More affordable housing is another drawcard for moving to regional towns2. But that could be changing in the months and years to come as a widespread boom in property values starts to drive up house prices in sea and tree change locations as well as cities.
Even if this COVID-fuelled lift in regional migration is short-lived, job prospects in regional locations are likely to motivate more people to consider a move to the country. Regional Australia accounts for around 40 per cent of national economic output and employs around one third of Australia’s workforce3. According to the Regional Australia Institute, there are more than 66,200 jobs available in regional towns. As these roles can no longer be filled by workers migrating to Australia from overseas, organisations are looking for ways to attract skilled employees from around the country instead.
Extra employee benefits in regional locations
While some newcomers in regional areas may have moved because they can now WFH, others are taking up frontline roles requiring them to work on-site. Jobs in mining and construction, retail and hospitality, healthcare and policing are among the vacancies that need to be filled in our regions. And if regional migration continues and local populations grow, demand for these skills is likely to be on the rise too.
When it comes to attracting new hires to regional roles, there can be additional benefits on the table. For employers with a distributed workforce located in remote or regional areas or across multiples sites, there are ATO-approved remote area benefits available, including relocation costs, rent payments, mortgage payments and fly-in fly-out (FIFO) expenses. By salary packaging, these costs and potentially saving on tax as a result, employees have an extra incentive to join an organisation offering benefits they won’t have access to in other locations.
What regional benefits can employees claim?
Regional area benefits available to employees will vary depending on their location, role and sector they work in. But generally speaking, eligible employees can salary package some or all of the following out-of-pocket costs associated with relocating, without incurring Income or Fringe Benefits Tax:
- Interest paid on a mortgage for the house an employee lives in
- Rent paid to an estate agent, private party or employer for the house an employee lives in
- Electricity or gas bills, if the employee salary packages their rent or interest on their mortgage as a regional/remote benefit
- Existing dwelling or land bought to build a home in a regional area
- A FIFO employee paying for their own flights to their point of hire may be eligible to salary package the cost of these flights
Research shows that compensation and benefits is the top incentive for changing jobs in 20214. Offering extra salary packaged benefits can help your organisation attract employees to regional roles without adding to your salary bill. It definitely makes sense to maximise the benefits all your employees are entitled to and enable them to make the most of potential tax savings on everyday living costs.
Reaching out to regional workers in the energy industry
With a headcount of 800+ employees across regional and office locations in Australia and New Zealand, Alinta Energy wanted a benefits offer that would deliver something for everyone on their payroll. Since partnering with Maxxia, they've experienced a rise in take-up of salary packaged benefits, including remote area benefits for employees working at power stations in regional Australia.
As a premium provider of employees benefits to many organisations across Australia, Maxxia have seen the difference salary packaging can make to the overall financial position of employees. Not only can take up of salary packaging potentially boost net household income for employees, a best-practice program supported by effective communication can also strengthen your employee value proposition as a whole.
Maxxia can offer your organisation a full benefits assessment to measure the effectiveness of your current employee benefits offer. We can also put a dollar figure to the potential savings and efficiencies from running the program and compare overall performance with best practice for your industry.
1. ABC News, Regional areas have enjoyed a pandemic influx, but many jobs are still waiting to be filled, 26 May 2021, https://www.abc.net.au/news/2021-05-26/people-go-regional-during-covid-but-arent-filling-available-jobs/100162952
2. ABC News, Regional job vacancies hit an all time high but lack of workers leaves employers desperate, 4 May 2021, https://www.abc.net.au/news/2021-05-04/regional-job-vacancies-hit-an-all-time-high/100112900
3. Regional Australia Institute, The Economic Contribution of Regions to Australia’s Prosperity, http://www.regionalaustralia.org.au/wp-content/uploads/Talking-Point-The-economic-contribution-of-regions-to-Australia%E2%80%99s-prosperity_to-send.pdf
4. The Achievers Workforce Institute, 2021 Engagement and Retention Report, https://www.achievers.com/au/resources/white-papers/workforce-institute-2021-engagement-and-retention-report/