How to buy

Updated: 27 Apr 2020

Selecting a provider

The employer will decide whether to administer salary packaging in-house or engage one or more salary packaging providers approved under this contact to administer all or part of their packaging scheme.

Employers may engage different providers to administer different benefits if they choose.

Employers should note this may result in additional administration. Issues which employers may consider when selecting a provider include price, customer service levels, complaint resolution procedures, systems infrastructure and support services.

To assist with comparing price, employers may wish to seek quotes from providers for the monthly cost of providing novated motor vehicles. Employers should specify a small range of typical vehicles. To ensure quotes can be compared employers should specify whether the lease is for a fully maintained vehicle (option 4 under 2.4b of this guide), whether the vehicle has standard equipment and paint, whether the vehicle is manual or automatic, and be plated for the same date.

The provision of salary packaging to eligible employees must be at no cost to employers. Salary packaging providers will charge employees an administration fee. Where the administration service is outsourced, the salary packaging fees are subject to their tender prices as detailed in section 7.

Employers should communicate their choice of provider and that provider’s contact details (section 6) to employees to enable employees to contact the provider directly.

The salary packaging provider will publish a procedure manual outlining all aspects of the salary packaging scheme on their website. In some cases, the provider may develop a Manual suited to the needs of specific employers. The manual should include all information to allow prospective participants to make informed decisions and provide the necessary forms and documentation for participation.

Transition arrangements

An employer who is currently outsourcing their salary packaging arrangements may wish to select a new provider from those on the panel under this contract.

Employers are advised to speak to the new provider about the arrangements involved in, for example, transferring data between providers, what actions the employer may need to take, and the timeframe involved. It may be advisable to obtain a written “transition plan” from the new provider.

Employees who are currently packaging a car under a novated lease may suffer a financial penalty if they were required to terminate the lease because their employer wishes to change salary packaging providers.

Maxxia (formerly McMillan Shakespeare), which was the sole provider under the previous contract, has agreed to an arrangement whereby an employee would continue to lease the car through Maxxia and the salary package would be administered by the new provider. This will involve an exchange of data between new and old providers. Further information will be available from the new provider.

Pricing

Maxxia Pty Ltd

Item No.

Description Price tendered (GST exclusive) GST component Total price tendered (GST inclusive)
1One benefit only that does not attract FBT excluding a motor vehicle lease $1.92 per participant per fortnight $0.19 per participant per fortnight $2.11 per participant per fortnight
2Two or more benefits only that do not attract FBT excluding a motor vehicle lease $1.92 per participant per fortnight $0.19 per participant per fortnight $2.11 per participant per fortnight
3A motor vehicle lease only $6.37 per participant per fortnight $0.67 per participant per fortnight $7.04 per participant per fortnight
4A motor vehicle lease and any other benefit $6.37 per participant per fortnight $0.67 per participant per fortnight $7.04 per participant per fortnight
5One or more benefits that attract FBT and any other benefits that do not incur FBT $1.92 per participant per fortnight $0.19 per participant per fortnight $2.11 per participant per fortnight
6One or more benefits that attract FBT $1.92 per participant per fortnight $0.19 per participant per fortnight $2.11 per participant per fortnight
7Package amendment fee $0 per occurrence $0 per occurrence $0 per occurrence
8Re-establishment fee $0 per occurrence $0 per occurrence $0 per occurrence

NLC Pty Ltd

Item No.

Description Price tendered (GST exclusive) GST Component Total price tendered (GST inclusive)
1One benefit only that does not attract FBT excluding a motor vehicle lease $0 per participant per fortnight $0 per participant per fortnight $0 per participant per fortnight
2Two or more benefits only that do not attract FBT excluding a motor vehicle lease $0 per participant per fortnight $0 per participant per fortnight $0 per participant per fortnight
3A motor vehicle lease only $0 per participant per fortnight $0 per participant per fortnight $0 per participant per fortnight
4A motor vehicle lease and any other benefit $2.88 per participant per fortnight $0.288 per participant per fortnight $3.17 per participant per fortnight
5One or more benefits that attract FBT and any other benefits that do not incur FBT $0 per participant per fortnight $0 per participant per fortnight $0 per participant per fortnight
6One or more benefits that attract FBT $0 per participant per fortnight $0 per participant per fortnight $0 per participant per fortnight
7Package amendment fee $0 per occurrence $0 per occurrence $0 per occurrence
8Re-establishment fee $0 per occurrence $0 per occurrence $0 per occurrence

Smartsalary Pty Ltd

Item No.

Description Price tendered (GST exclusive) GST Component Total price tendered (GST inclusive)
1One benefit only that does not attract FBT excluding a motor vehicle lease $3.15 per participant per fortnight $0.31 per participant per fortnight $3.46 per participant per fortnight
2Superannuation $1.82 per participant per fortnight $0.18 per participant per fortnight $2.00 per participant per fortnight
3Two or more benefits only that do not attract FBT excluding a motor vehicle lease $3.15 per participant per fortnight $0.31 per participant per fortnight $3.46 per participant per fortnight
4A motor vehicle lease only $6.29 per participant per fortnight $0.63 per participant per fortnight $6.92 per participant per fortnight
5A motor vehicle lease and any other benefit $6.29 per participant per fortnight $0.63 per participant per fortnight $6.92 per participant per fortnight
6One or more benefits that attract FBT and any other benefits that do not incur FBT $6.29 per participant per fortnight $0.63 per participant per fortnight $6.92 per participant per fortnight
7One or more benefits that attract FBT $6.29 per participant per fortnight $0.63 per participant per fortnight $6.92 per participant per fortnight
8Package amendment fee $0 per occurrence $0 per occurrence $0 per occurrence
9Re-establishment fee $0 per occurrence $0 per occurrence $0 per occurrence

Government taxes and charges

All taxes, duties and charges imposed or levied in Australia or overseas in connection with the performance of this agreement will be borne by the supplier.

Third party purchasing

Clause 6 of the Public Works and Procurement Regulation 2019 allows the NSW Procurement Board to provide access to suppliers of public sector bodies to state contracts standing offer agreements for the provision of goods and services. These suppliers are known as Nominee Purchasers. The public sector bodies making the nominations are known as Nominating Agencies.

'Nominee Purchaser' means a supplier to a public sector agency, nominated by the public sector agency to be authorised to place Orders under Standing Offer Agreements for works done as such a supplier and registered by NSW Procurement.

Access of nominee purchasers to NSW Government contracts standing offer agreements:

  • is limited to standing offer agreements relevant to the contract between the nominating agency and the nominee purchaser, and which are specifically listed in the nominee purchaser’s registration and
  • is for a fixed period of registration, usually ending on the completion of the term of the contract between the nominating agency and the nominee purchaser.

A nominee purchaser must not purchase goods or services under a NSW Government contract standing offer agreement, unless they are related to its obligations under a contract with a public sector agency and are used during the term of such a contract or included or incorporated in works, goods or services to be provided to the public sector bodies.

Frequently asked questions

How is an employee’s salary package administered?

Prior to commencing salary packaging, employees are required to sign a salary packaging agreement with their employer. This agreement is at appendix C. This agreement is in addition to the salary packaging agreement between the employee and the provider.

Generally, each employee will operate their salary packaging arrangements within a “package year”. Irrespective of when packaging commences, the “package year” ends on 31 March in order to comply with FBT year reporting requirements. Each new “package year” is for 12 months and commences on 1 April. Employees may review and vary their benefits within each “package year”. However, additional administration fees may be incurred.

The following funds will be deducted from an employee’s salary over an agreed pay period to cover the cost of the salary packaging arrangement:

  • the cost of their chosen benefits
  • any FBT that applies to those benefits
  • the administrative fee that applies to the benefits
  • any post-tax employee contribution.

Regular payments

Benefits that have a fixed instalment amount and occur on a regular basis will be paid as a regular payment. Employees will be required to supply the following information to their service provider:

  • the name and address of where payments are to be made
  • the frequency of the payments
  • the payment amount
  • the commencement date for regular payments
  • the employees banking details including BSB and account number for regular EFT payments.

Non-regular payments

These payments are for benefits which do not have a fixed instalment amount or do not occur on a regular basis. Payments will be made on receipt of a written claim, for example in the case of a payment to register a motor vehicle.

An employee who directly pays for the cost of a benefit will also be reimbursed on receipt of a written claim. Reimbursement will usually be made to the employee’s nominated bank account.

Changing the agreed salary package

Individual employees may change their agreed salary package at any time. However, additional administration fees may apply.

Employees will be able to change their agreed salary package at least once during the salary packaging year free of charge.

Benefit payments - terms and conditions

Generally, a salary packaging provider will not reimburse benefit costs which were incurred and paid for prior to the commencement of the flexible salary package. However, costs which were incurred prior to the commencement of the flexible salary package but paid for after the commencement of the package may be reimbursed.

Payment of benefit items will only be made where there are sufficient funds in an employees account at the time payment is due. Employees will not be able to obtain reimbursements for benefits payments made by themselves unless they have accumulated sufficient funds to cover these costs. Employees may however incur the expense and hold back their claim until they have accumulated sufficient funds. At that time a reimbursement will be made.

A salary packaging provider will cease to pay any benefit when the total yearly allocation for that benefit has been expended. Therefore, when deciding the amount of money to allocate to any particular benefit, employees may wish to provide an additional amount to meet any increases in the cost of that benefit during the Salary Package year.

A reconciliation of the employee’s flexible salary package will take place at the end of each package year. Any benefit entitlement not paid will be rolled over to the next package year, unless the employee seeks reimbursement of the excess available.

If an excess credit exists in the employee’s package account, and the employee does not wish to leave that amount in the account to be rolled over to the next package year, then a claim can be made against the package account. The refund will normally be processed as cash salary through the payroll system and income taxed.

What happens if a participant’s employment circumstances change?

Reduced salary

A participant’s employment arrangements may alter while they are salary packaging. It is the responsibility of both the employee and the employer to notify the salary packaging provider if an employee’s salary will be reduced. Reasons for a salary reduction may include:

  • A workers compensation claim - Further detail on workers compensation claims is in section 3.2a.
  • Leave on half pay or unpaid leave - In most instances, approval of any period of leave without pay of more than five days will require the employee to cease salary packaging.
  • Suspension without pay- If an employee is suspended without pay, any salary packaging arrangements will cease.
  • A change from full-time to part-time employment - Where an employee ceases full time employment and enters into a new agreement with the employer to work part time, the existing salary package will cease from the commencement of part time employment, and a new salary packaging agreement will have to be negotiated.

Where possible, the salary packaging provider should be notified in advance of the date the salary will reduce to enable the necessary arrangements to be made.

With the approval of the employer, salary packaging can recommence once the employee returns to full time employment.

Note that employees who are promoted, redeployed, transferred or seconded to another employer are subject to the policies and arrangements that apply with the new employer.

Workers compensation

Payment of salary whilst absent from duty is made from an employee’s entitlement to paid leave (sick and/or extended). If an injured employee makes a claim for workers compensation and the fund manager accepts the claim, payment is made to the agency for the time lost. Leave is then re-credited.

After 26 weeks of payment for time lost the payment from the fund manager reduces to the statutory rate. The employee is able to make up salary to the full time rate by using up paid leave entitlements.

Salary packaging may only continue whilst the employee is able to maintain salary at the full time rate. The existing salary package is to cease:

  • if the employee has insufficient paid leave entitlements to maintain salary whilst the fund manager makes a decision to accept the claim; or
  • when the employee is reduced to only the statutory rate of payment.

Any shortfall in funds which occurs due to reduced salary is the responsibility of the employee.

Cessation of employment

From the date employment ceases the salary packaging provider will cease all benefit payments. Upon becoming aware of the date:

  • employment ceases for whatever reason; or
  • an employee is promoted, redeployed, transferred or seconded into a position in an agency that does not offer salary packaging.

The employer and employee must immediately notify the salary packaging provider and advise the last payment date. The salary packaging provider will send final payments and determine any action to be taken with account balances. Any remaining balance can be paid as a lump sum towards an existing benefit item, or paid to the employee as salary and taxed accordingly.

Appendices and other related information