How is Salary Packaging Administered?

The process of administering employee's salary packaged payroll deductions can be simple or involved depending upon the type of benefits being packaged. As such employers may elect to administer "in house" using own or licensed software, administer externally or a hybrid of both.

The benefits of external administration is that employers are

• minimise the impact of employees salary packaging arrangements on their own resources;
• external administrators responsible for compliance with ATO legislation;
• cost of employee's salary packaging is borne by them through a periodic fee which is paid for in pre-tax dollars;
• Creating an arms length arrangement between employer and employee, therefore removing a potential conflict of interest;
• Administrators can assist employers in formulating their salary packaging policy.