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									                             The University of Queensland
                                     Human Resources Division

     Salary Packaging - Overview
Superannuation         Car Parking         In-House Benefits         Motor Vehicles           Portable Computers

         •      Introduction
         •      General Principles
         •      How Does Salary Packaging Work
         •      Eligibility
         •      Employee Benefits Available
                    o Superannuation
                    o University Car Parking
                    o “In-House” Benefits – UQConnect Internet Services
                    o Motor Vehicle Leasing
                    o Portable Computers
         •      How To Take Part
         •      Changing or Terminating the Package
         •      Fees and Charges
         •      Effects of Salary Packaging on Employee Entitlements
         •      Frequently Asked Questions

     Introduction

     The University recognises the value to employees of flexible remuneration. Salary packaging
     is a means of providing this flexibility. It allows the employee to change the structure of their
     remuneration package and receive part of their salary in the form of non-cash benefits.

     Salary packaging was made available to staff through the 1999 Enterprise Agreement that
     allows employees to package employee superannuation contributions. This has been
     expanded to also include University Parking, UQConnect Internet Services and Motor
     Vehicle Leases.

     General Principles
     The intention is to offer all eligible University employees the opportunity to participate in
     salary packaging arrangements.

         •      Participation in salary packaging is voluntary and you are free to choose those
                benefits that best suit your individual needs.

         •      This arrangement is only available to University of Queensland employees.

         •      Motor vehicle lease packaging must not exceed 50% of the employee’s gross base
                salary. Additional payments such as market loadings, responsibility loadings,


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           overtime, library shift allowances and recreation leave loading should not to be
           included when determining the maximum allowable.



    •      Any costs such as Fringe Benefits Tax (FBT), superannuation surcharges and
           administration fees associated with providing salary packaging will be a cost to the
           employee.


How Does Salary Packaging Work?

Salary packaging allows you the opportunity to forgo part of your pre tax salary in order to
receive a benefit. The value of the benefit is deducted from your gross salary, this reduces
your taxable income and thus the amount of tax payable. Payroll deductions such as
superannuation and University car parking that are currently deducted from your post-tax
salary can be salary packaged resulting in a net increase in pay.

Previously parking permit charges were deducted from your net salary after tax. Under the
salary package arrangement the cost is deducted from the gross salary reducing taxable
income and increasing net take home salary.

Without Salary Packaging                             With Salary Packaging

Gross fortnightly salary        $2,000.00            Gross salary                $2,000.00
                                                     Car Parking                  - $30.00
Taxable salary                  $2,000.00            Taxable salary              $1,970.00

Less:
Taxation                         - $428.00           Taxation                    - $418.00
Car Parking                        - $30.00

Net Salary                      $1,542.00            Net Salary                  $1,552.00

From this example the take home pay has increased by $10.00 per fortnight. Please
note - the amount of the increase in take home pay will vary depending upon your
marginal tax rate.


Eligibility
Salary Packaging is available to all full time and part time employees of The University of
Queensland, with the exception of casual employees, who may be able to package voluntary
superannuation contributions. Employees on contracts of less than 12 months are limited in
the benefits they may receive. Employees intending to salary package a motor vehicle will
require a continuous appointment of 1 to 3 years, but preferably for a maximum of 2 years.
Consideration will be given to employees that are reappointed on a 12 monthly basis who
wish to enter into a leased vehicle arrangement.


Employee Benefits Available
    •      Superannuation

    •      University Car Parking
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    •      In-House Benefits – UQConnect Internet Services

    •      Motor Vehicle Leasing

    •      Portable Computer (Notebook/laptop or PDA) – when it is primarily used for work
           related purposes.


Superannuation

Salary packaging of superannuation is already in place for University employees. A guide to
salary packaging of superannuation is available at
http://www.uq.edu.au/shared/resources/personnel/salarypack/SalPakSuperannuation.pdf.
Please contact Superannuation Section on (07) 3365 2993 if additional information is
required.


Car Parking

University car parking permit fees can be salary packaged without the imposition of Fringe
Benefits Tax. Unless advised otherwise by the employee parking permit charges deducted
through a payroll deduction will automatically come under the salary packaging arrangement.
If additional information is required please contact UQ Traffic & Parking on (07) 3365 1016.


“In-House Benefits” – UQConnect Internet Service

Under the “In-House” benefits arrangement, University of Queensland employees
uses UQConnect Internet Service can salary package the costs via fortnightly payroll
deduction.

The maximum combined amount of “In-House” benefits allowable for salary
packaging will be $1,200.00 in any fringe benefits tax year (1 April- 31 March) and is
inclusive of GST. The maximum amount for salary packaging as an “In-House”
benefit has been determined with reference to Australian Taxation Office legislation,
which exempts payment of Fringe Benefits Tax (FBT) up to this limit.

Please refer to http://uqconnect.net/index.html?page=27704 for further information on
internet services officered by UQConnect.



Motor Vehicle Leasing

Motor vehicle leasing is available through an agreement between Lease Plan Australia
and The University of Queensland. A guide to Motor Vehicle leasing is available at
http://www.uq.edu.au/shared/resources/personnel/salarypack/MotorVehicleGuidetoE
mployees.pdf.

Laptop/Notebook/PDA and Business Software Packaging



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Laptop/notebook/PDA and business related software can be salary packaged if it is
going to be used primarily for work related purposes. Employees are restricted to
one Laptop/Ntebook/PDA per FBT year (1 April to 31 March of the following year)
Please refer to the salary packaging website http://www.uq.edu.au/current-
staff/index.html?page=10571&pid=10555 for further information regarding this
matter.

How to Take Part
    •      For superannuation information refer to
           http://www.uq.edu.au/shared/resources/personnel/salarypack/SalPakSuperannuation.p
           df. Alternatively contact Superannuation Section on (07) 3365 2993.


    •      Car parking deductions for new employees will be automatically salary packaged
           unless otherwise advised by the employee or UQ Traffic & Parking (07) 3365 1016.

    •      For motor vehicle leasing, “In-House” benefits and portable computer
           notebook/laptop or PDA) enquiries refer to
           http://www.uq.edu.au/shared/resources/personnel/salarypack/MotorVehicleGuidetoE
           mployees.pdf. Alternatively contact the Salary Packages Officer on (07) 3365 1019
           or email


Changing or Terminating the Package
You may change the structure or terminate salary packaging by giving one month’s notice.
Special conditions apply to termination of motor vehicle lease arrangements. Please contact
the Salary Packages Officer on (07) 3365 1019, or Superannuation Section on (07) 3365
2993.


Fees and Charges
The University will apply a 1 or 2% administration fee to salary packaging depending on the
service. This will be calculated on the gross value of certain salary package benefits. Benefits
such as superannuation and car parking will not incur the 1% fee. Motor vehicle leasing will
attract the 1% fee and management fees will be charged by the lease company. These will be
included in amounts payable under the lease contract.


The Effect of Salary Packaging on Employee Entitlements
All entitlements such as base salary, allowances, overtime and annual leave loading will
continue to be paid at the rates prescribed by the University’s Academic and General Staff
Enterprise Bargaining Agreements.


Frequently Asked Questions
What are the financial benefits to me of salary packaging?




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Certain benefits depending on your salary, such as car parking and superannuation offer the
employee an immediate opportunity to increase his/her net take home salary. The cost savings
will depend upon your marginal tax rate.

Motor vehicle leasing under the salary package arrangement offers employees the opportunity
to lease a vehicle and, depending on the individual’s taxation situation, may offer a financial
benefit.

What are Reportable Fringe Benefits (RFB)?

Reportable fringe benefits are the grossed up value of fringe benefits and are shown on the
employee’s PAYG Payment Summary under Reportable Fringe Benefits. The amount shown
on the PAYG Payment Summary as RFB, represents what you would have received had the
University given you the fringe benefit as gross salary calculated at the highest marginal tax
rate (45%). For example, if the value of the fringe benefit was $500.00 an amount of $934.60
would be reported.

Fringe Benefits Tax (FBT) exempt benefits such as superannuation, car parking and laptop
computers are not required to be reported on the PAYG Payment Summary. Motor vehicle
salary packaging attracts FBT and will be reported on the PAYG Payment Summary.

  The Reportable Fringe Benefits amount is not included in the employee’s assessable
                           income for taxation purposes.

The consequence of an RFB amount being included on a PAYG Payment Summary results in
this amount being included in a number of income tests relating to the following government
benefits and obligations:

    •      Child support payments
    •      HECS repayments
    •      Medicare levy surcharge
    •      Superannuation surcharge
    •      Termination payments surcharge
    •      Personal superannuation surcharge
    •      Rebate for personal superannuation contributions; and
    •      Rebate for contributions to a spouse’s superannuation

The RFB amount will also be taken into account in the income tests for the Family Tax
Benefit, the Child Care Benefit and the parental income test for the youth allowance. (These
income tests will however, only include the non-grossed up value of the fringe benefit).

   If you are in doubt about the effects of Reportable Fringe Benefits, the University
               strongly advises that you seek independent financial advice.

What administration fees will I be charged?

Salary packaged benefits such as superannuation and car parking will not attract any fees. The
other salary packaged benefits will attract a 1 or 2% fee calculated on the pre tax value of the
benefit.

What happens if I go on sick leave, recreation or long service leave?

Deductions will continue to be made and benefits provided whilst you are on paid leave.

What happens if I go on leave without pay?

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Deductions can not be made if you are not receiving salary, and you will need to arrange
payments from your own resources for this period. You should contact the Salary Packages
Officer to discuss the options.

What happens if I leave the University?

If there are any unpaid amounts, these will be deducted from salary or from any leave
entitlements. Any amounts owing to the employee will be paid via EFT less taxation to the
employee’s bank account. The situation with regard to motor vehicles will depend on the
employee’s circumstances, which should be discussed with the Salary Packages Officer
before you leave.

What if I want additional information?

Contact the Salary Packages Officer in Employee Benefits Section on (07) 3365 1019.




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