Share of Savings Changes
Salary Packaging Benefits for Employees in HSU Covered Awards
Salary Packaging Benefits for Employees in HSU Covered Awards
The NSW Government recently announced that eligible employees in HSU covered awards would be provided 100% of the salary packaging benefits from this financial year.
Commencing from 1 July 2024, eligible employees share of tax savings will rise from 70% to 100%. This means that eligible employees will receive a larger portion of the tax benefits in their take-home pay. The change differs from previous salary packaging practices where NSW Health received a 30% portion of the tax savings.
The changes to salary packaging will directly benefit NSW Health employees in HSU covered Awards.
There are around 60,000 healthcare workers who may benefit from these changes across regional and rural NSW, in a range of jobs spanning: allied health, health and security assistants, administration staff, cooks, patient transport staff, paramedics, sterilisation technicians, tech assistants, and telephonists.
To check your eligibility, please contact the Smartsalary team.
If you are an existing, eligible employee in a HSU covered award who currently utilises salary packaging, NSW Health will deliver the change in two stages:
NSW Health will liaise with salary packaging administrators to alter their processes and systems so that NSW Health’s share of savings will no longer be deducted from employees’ salary packaging arrangements. The target implementation date is 8 November 2024.
Following the implementation of the system change, a one-off compensation payment will be paid to eligible employees – in alignment with an issued NSW Health Determination. The compensation payment will be equivalent to the 30% “employer share of savings” that has been deducted from 1 July 2024 to the implementation date. Compensation payments will be paid in December 2024.
This payment will ensure that eligible employees receive the same amount of pay that they would have received had their share of savings been able to be increased to 100% from 1 July 2024.
This compensation payment will be subject to PAYG withholding and will attract a superannuation contribution. For this reason, the payment will be increased, based on the employee’s annual salary, to ensure that eligible employees are given the full compensation amount in their take-home pay after taxes. This increase, called a “gross-up”, is added to cover the taxes the employee will owe on the extra income.
For existing, eligible employees who currently utilise salary packaging, the changes will be automatically applied – no action is required.
For those considering participating in salary packaging arrangements, please contact your salary packaging administrator to discuss your eligibility to salary packaging. NSW Health strongly recommends employees seek independent financial advice to understand how this change may impact personal circumstances.