Definitions

Custom Fleet is the University's preferred provider of motor vehicle leases.

Exempt Benefit is a benefit that is exempt from Fringe Benefits Tax.

Fringe Benefits Tax (FBT) is an indirect tax paid by employers on the grossed up taxable value ('cost') of benefits provided to employees (or their associates) in respect of their employment.

FBT Rate is currently 48.5% which is equal to the top income tax marginal rate plus the Medicare levy.

Marginal tax rate is the rate of tax applicable to the income range into which the employee's taxable income falls.

Novated Lease refers to a three way arrangement between the staff member, the University and Custom Fleet. The staff member leases a vehicle directly from Custom Fleet. The staff member and the University, along with Custom Fleet sign a Novation agreement which stays in place for the duration of the lease whilst an employee of the University.

Pay As You Go (PAYG) is a withholding tax system that has replaced Pay As You Earn (PAYE) and other withholding systems.

Payment Summary is the new terminology under the PAYG system for group certificates.

Reasonable Benefits Limit (RBL) is a maximum amount, indexed each year, up to which retirement monies are given concessional tax treatment. Amounts above your RBL are taxed at the top marginal tax rate including Medicare levy (currently 48.5%).

Reportable Fringe Benefits - Motor Vehicle leasing will attract fringe benefits tax and this amount is included in the total salary packaging deduction. If the taxable value of the fringe benefits you receive in a FBT year (1 April to 31 March) exceeds $1000, the grossed-up taxable value of those benefits will be recorded on your payment summary (group certificate) for the corresponding income year (1 July to 30 June).

The Australian Taxation Office incorporates reportable fringe benefits on payment summaries (group certificates) for calculation of the following:

• superannuation surcharge
• Medicare levy
• eligibility for certain social security benefits
• rebates for contribution to spouse superannuation
• repayment of HECS debt
• child support payments
• termination payments surcharge

Salary packaging is a legal process whereby an employee, with the employer's approval, remodels existing cash salary into a combination of cash and non-cash salary.

Superannuation Contributions Tax at the rate of 15% is payable on salary packaged superannuation contributions where no PAYG tax has been paid.

Superannuation surcharge is a tax of up to 15% (sliding scale) on top of the existing 15% contributions tax on employer contributions and is levied where the sum of adjusted taxable income plus employer superannuation contributions exceeds a set limit (at 1 July 2000 of $81,493, at 1 July 2001 of $85,242, and at 1 July 2002 of $90,527).

Taxable benefit is a benefit that attracts Fringe Benefits Tax.

Tax free component of a termination payment is the first $100,696 (at 1 July 2000), $105,843 (at 1 July 2001) $112,405 (at 1 July 2002) indexed annually.

University-provided benefits are any non-cash items received in lieu of cash salary and refer to extra superannuation contributions or a Motor Vehicle Novated Lease in this context.