Salary packaging is also referred to as “salary sacrificing” or “flexible remuneration planning”.

In essence, salary packaging allows you to structure your existing salary into a combination of take-home pay and a mix of approved benefit-items. Your employer still pays you the same amount, but by remodelling your salary package, you gain greater benefits from your salary.

For example, your salary package could include a car lease. Your employer would pay the lease on your behalf using your pre-tax salary. However, as you are now receiving less cash, you pay less PAYE income tax.