A salary sacrifice commonly known as total remuneration packaging or salary packaging. It will be an arrangement between an employee and an employer, in which the employee accepts to sacrifice their future rights to wages or salary in the back for the employer giving them with welfare of a similar amount. The salary sacrifice for not for profit organization are similar as for business and a successful salary sacrifice will explain the amount of wage or salary to be sacrificed. But this amount should be entered before the employee to be paid and prior to any work is done. An effective arrangement is as follows:
• The employee providing income tax on decreased wages or salary
• The employer may be legally answerable to pay FBT (Fringe Benefits Tax) on the fringe welfare given.
• The employer may have to provide the payment summary reports of certain benefits of employees.