PBI and Charity Salary Packaging: the $15,900 Cap

PBI, health promotion charity or rebatable: why it matters

Three labels decide what a not-for-profit employee can package, and they come from registration, not from what the organisation says about itself.

• Public benevolent institution: relieves poverty, sickness, disability or distress as its main purpose. Exemption up to $30 000 grossed-up.
• Health promotion charity: promotes the prevention or control of disease in people, such as cancer, heart or mental health foundations. Same exemption.
• Rebatable employer: other registered charities and certain not-for-profits (scientific, religious, educational, sporting, community service). FBT is reduced by a rebate of 47%, on benefits up to $30 000 grossed-up per employee.

Your packaging provider knows which one applies. The ACNC charity register shows each charity's subtypes, PBI and health promotion charity included.

What the same package is worth in each case

With a rebatable employer the FBT passed on is part of the package, which is why tax saved is slightly higher: more pre-tax salary is sacrificed to cover it. The net figure is what changes in your pocket.

Disability, aged care and community services

Many charitable NDIS providers, aged care operators and community health services are registered PBIs, which is why salary packaging is a standard line in their job ads. For-profit NDIS and aged care providers are ordinary employers: packaging living expenses there costs FBT at 47% and does not pay. If an employer moves from a charity to a company structure, the packaging stops at the change.

Part-time and casual staff

The cap is the same $15 900 whatever your hours, but you can only package what you earn. A support worker on two days a week with a salary of $31 000 could in theory package half of it; in practice the saving per dollar is low at that level, because part of the packaged amount comes out of income taxed at 15% or not at all below $18 200. Casual employees can usually package too, through equal deductions from each pay, but irregular rosters make it easy to over-commit a deduction in a quiet week. Many providers set a minimum pay after packaging for that reason. When you work for two PBIs, each employer gives you its own cap.

Before signing up, ask the provider three things: the yearly or per-pay fee and who pays it, how bills are paid (card, direct payment or reimbursement), and what happens to an unspent balance when you leave.

To add meal entertainment, a car or super to the calculation, use the full salary packaging calculator, the meal entertainment page and the novated lease calculator.