Tax-Savvy Rewards to Appreciate Your Team

As a practice owner or manager, you know that having an amazing team is the secret ingredient to running a thriving business.

That's why I'm excited to share three tax-savvy rewards to help you appreciate and celebrate your incredible staff, without worrying about a hefty tax bill.

Here's a breakdown of three tax-savvy strategies you can adopt to reward your amazing employees:

1. Salary Packaging

Salary packaging allows employees to structure their pay to include both cash and benefits. Common benefits such as novated leases for vehicles, work laptops, phones, or extra superannuation contributions typically minimise tax impacts and avoid fringe benefits tax (FBT).

• Ensure proper structuring with the help of an accountant to achieve compliance with tax regulations.

2. Gift Cards Under $300

Gift cards are a simple, tax-effective way to show appreciation on an infrequent basis, such as during Christmas or after a major team achievement.

• These must be under $300 and not entertainment-based to be exempt under the ATO's "minor and infrequent exemption."

• Examples: A Rebel Sport or Westfield gift card works well.

3. Cash Bonuses

Cash bonuses are always a hit with employees, but come with tax consequences.

• Bonuses must be processed through payroll, which triggers PAYG withholding, superannuation, and potentially payroll tax.

• When budgeting for a cash bonus, consider adding an extra 25%-30% on the bonus amount to account for these deductions.

Bonus Non-Monetary Appreciation Ideas

• Acknowledgment: A simple "thank you" can go a long way in building morale.

• Career Investment: Sending employees to industry conferences or training courses for professional development.

• Gift of Time: Reward exceptional effort with a day off to spend with friends and family.

I hope you found some helpful takeaways in these three tips! Your team is truly the heart of your practice, and showing them the proper appreciation can do wonders for morale and retention.

If you'd like more guidance or have specific questions, particularly regarding tax-specific arrangements such as salary packaging, please feel free to ask. We recommend consulting your accountant or reaching out to GrowthMD—we're here to support you.