I did make a fast switch from the “package” conditions of that bloke’s contract and “salary packaging” (aka “salary sacrifice”), although it’s clear that in the news story the bike was not provided under “salary packaging” arrangements.

Hielke’s employer reckons that A ‘full FBT’ employer does not have the flexibility under the tax act to offer as extensive a range of benefits, but a quick look at the ATO web site suggests that this might not be so:

There is no restriction on the types of benefits that can be sacrificed. The important thing is that these benefits form part of your remuneration, replacing what otherwise could have been paid as salary. The types of benefits generally provided in salary sacrifice arrangements by employers include fringe benefits, exempt benefits and superannuation.

I note that common fringe benefits include cars and goods. While I’d prefer that they said “vehicles” (which would automatically include bikes), I think it’s fair to say that bicycles would come under the heading “goods”.

So as far as I can tell, there’s no external restriction on what can be salary packaged—it’s a private arrangement between employer and employee. But what the hell do I know about it?

The example from SA appears to be an arrangement whereby an organisation provided a bike as part of a person’s total package. This is different to ‘salary packaging’ which is where employees change the structure of their remuneration package and take non-cash benefits in lieu of salary (and make payments in pre tax dollars).

Note, the Fringe Benefits Tax Assessment Act, Income Tax Assessment Act and Goods and Services Tax Act define how benefits are to be treated for taxation purposes. A ‘full FBT’ employer does not have the flexibility under the tax act to offer as extensive a range of benefits as you may see in hospitals and charitable organisations (these organisations are FBT exempt).

From the article, it appears that the organisation is not ‘salary packaging’ bicycles, but rather offering it to this employee as an extra addition to his usual salary. This type of arrangement would be handled on a case by case basis during the contract negotiation stage.

(I’ve put this question to our salary packaging coordinator, with no response as yet. I don’t think I’m the first to ask and I’m not holding my breath.)