Salary Packaging Benefits and Home Loan
What is the salary packaging benefit?
Nurses, health care workers, and social workers for charitable organization are offered to package their salary so that a separate component is taken out before tax is calculated. Such facilities are available for employees with permanent appointment only. The sole purpose of such pre-tax the deduction is to minimize the tax liability for those hard-working people.
A typical payslip extract looks like below:
There are also some administration fees you need to pay if you are using such services. In the above picture, pre-tax deduction of $346.53 is taken out of the employee’s pre-tax income and deposited separately to the employee’s nominated bank account.
Employers are then required to pay tax on the remaining amount only. This way, employees can take up to $9,000 home as a tax-free income.
Is this good or bad thing when applying for a home loan?
Salary packaging is never a bad thing when borrowing for a home loan. If the lender is chosen carefully, this would rather help customers borrow more as it is treated tax-free income.
Can you continue salary packaging even after the mortgage?
Yes, of course. You need to speak to your employer and provide them with the evidence of your mortgage accounts. You need to update the account details with the employer and provide them with your newly opened loan account to start depositing the salary packaged benefits.
Will all the lenders treat Salary Packaging income the same way?
No. The salary packaging and their tax implications are a very complex concept. Lenders didn’t even have properly trained staffs up until a few years ago! With the rise of Nursing and health care sector providing a large number of jobs, the payslips with salary packaging are becoming more common these days.
Lenders have now started recognizing the needs and upgraded themselves. However, not all lenders treat this income the same. Some lenders treat this packaged benefits as gross income and some treat this as tax-free. Everything else being the same, this approach of treating gross and net can impact your borrowing capacity by up to $60,000.
Where to find experienced mortgage consultants for Salary Packaging Benefits?
If you are in the Nursing or health care industry, chances are that you also have a similar payslip. We need to submit your application to the appropriate lender to maximize the effectiveness of home buying options. Capkon has been helping thousands of families with salary packaging benefits. In fact, we have established ourselves as specialist home loan advisors for Nurses and Nursing professionals.
If you are looking for specialist advice on home loan and property, you can SPEAK to one of our mortgage consultants and begin the finance approval process!