Back to Benefit list

Who can salary package rental payments?

This salary packaging option is available for the following industries:

• Healthcare & Charity
• Rebatable & Others

What is salary packaging rent?

If you’re a renter and eligible for salary packaging, you’ll want to know about the rent benefit. This benefit allows eligible workers to pay their rent using pre-tax dollars.

Ordinarily you would pay rent using your money after tax is taken out, but salary packaging allows you to pay for it – up to a selected or “capped” amount – before tax.

By taking advantage of the rent benefit, you know that your rent is budgeted for every month, Maxxia is managing the funds for you, and best of all – you could potentially save some cash by reducing your tax!

How much can I package?

Rent is included in the Living Expenses benefit as part of ATO-approved salary packaging.

Employees in the Healthcare sector can package $9,010 towards payments considered Living Expenses. Employees in the Charity sector can package $15,900 of their pre-tax income.

Why should I pay for rent through salary packaging?

Here’s just some of the reasons:

• Potential to reduce your taxable income every year.
• You could increase your disposable income and savings.
• Enjoy the convenience of setting regular reimbursements from your Maxxia account to your bank account to cover rental payments.

How does salary packaging rent work?

Salary packaging your rent can seem overwhelming, so we’ll try to break it down.

Let’s say your rent is $1,500 a month, or $18,000 a year. If you get paid monthly, your employer will send $1,500 of your pay cheque to Maxxia before tax is taken out. If you have no other benefits, the remainder of your pay is then taxed and paid into your bank account, to spend how you please.

You can set up regular reimbursements from your Maxxia account to make life easier. These payments are in line with the funds Maxxia receives from your employer.

How much can you save through salary packaging?

The below table demonstrates how salary packaging can potentially save you money by reducing your taxable income, using the healthcare cap.

Imagine Maxine earns $60,000 a year as an intern doctor. She rents a share house with other junior doctors, and her rent is $18,000 per year. Because she works at a public hospital, she is able to salary package up to $9,010 of her salary before tax is taken out. Rent is her biggest expense, so she takes advantage of the rent benefit and uses pre-tax dollars to pay her landlord each month.

By paying for rent with salary packaging, Maxine could be taking home an extra $2,796 per year*! She is also paying half of her yearly rent tax-free.

Potential financial benefit on rent. Annual salary $60,000

Rent Salary Package Cap: $9,010

Important things to know

You can only salary package rent payments for a property you live in and with a lease in your name or jointly with others.

KEEP EXPLORING

Other salary packaging items you might be interested in