iPads & Tablet computers: Salary Packaging update

Hi Readers – Simon Ellis here, blogging about iPads and Tablet computers…

With the upcoming release of the iPad 3 (iPad 2s?) we thought now was a good time to update our customers on the state of play regarding salary packaging and tablet computers – which are growing fast as a salary packaging option.

Lots of our employers allow laptop packaging but in just a couple of years, the number who now allow an iPad/tablet alternative has grown to nearly 25% from almost zero.

“Why the change?” I hear you ask.  What’s different for an employer now that wasn’t different a few years ago?

Well, initially there was resistance from employers within the industry when it came to packaging these items.  It was assumed that employees with iPads/tablets would struggle to meet the eligibility test for packaging – i.e. that the device must be used primarily as an employment tool.

However that perception is starting to change as employers come to recognise:

  1. that the business-use potential of iPads and Tablet computers is greater than previously thought and more people are using the devices in their day-to-day employment activities, and
  2. that many employees use an iPad/tablet in conjunction with a laptop to provide a more complete mobile computing solution.

To be clear, the “primarily for employment purposes” eligibility test still applies and the assumption that iPads/tablets are unsuitable for certain business roles is still valid in some cases.  The rules haven’t changed – what’s changed is our general understanding of how iPads and tablets can be used as a business tool.

So what does this all mean for someone thinking about packaging an iPad or tablet computer?

It means that if you use (or intend to use) an iPad/tablet computer in your day-to-day employment then you should raise the option of salary packaging such items with your employer – if it isn’t already offered.

And if it is already offered . . . then you should probably think about taking advantage of the tax savings available!

* Smartsalary customers should check their employer’s salary packaging rules, accessed via login to their packaging account, to confirm the tablet/portable computer packaging options available to them.

Leave a comment.

7 Responses to “iPads & Tablet computers: Salary Packaging update”

  1. 1 Davo March 19, 2012 at 1:39 am

    This isn’t a particularly helpful post (from a practical point of view). You’re basically saying “ask your employer” in a very long winded way.

    What SmartSalary users *would* find useful would be a list of your biggest clients (eg Health Dept of WA) and whether they accept packaging ipads/tablets

    If this is not possible due to confidentiality reasons etc, it would be nice if individual users could log in to their account and have some sort of status page which indicates if these items are indeed packageable.

    I know this means work for SmartSalary, but it would also be appreciated by Smartsalary users and be another differentiator between you and Paradigm.

    • 2 ceosmartsalary March 20, 2012 at 3:38 pm

      Hi Davo,

      Thanks for your feedback on how we can make it clearer to our customers that they can salary package an iPad/tablet. Your idea has certainly given us food for thought!

      We’re thinking that we can provide website users with a separate icon once they’ve logged in that shows they can package an iPad/tablet – either in addition to a laptop, or in place of a laptop. This should be ready in the next couple of months.

      We hope this will clear things up for any confused employees going forward.

      Matt Wilson (Online Marketing Manager for Smartsalary)

  2. 3 Shirani Kekulkotuwage April 3, 2012 at 6:33 am

    I want t buy a car Mazda RX 8. from carsales .com. Will i able to claim with salary packaging?

    Shirani k.

    • 4 ceosmartsalary April 10, 2012 at 10:23 am

      Hi Shirani,

      You are able to salary package a vehicle sourced through carsales.com.au from a private seller as long as the vehicle is financed as a novated lease.
      Being a private sale means the financier will require additional documentation as part of the finance approval process. Also, Please note that for salary packaging purposes, a dealer-provided vehicle may be cheaper after finance because 1/11th of the dealer price can be claimed back as GST. We would be happy to give you a call to provide more detail about private vehicle sales, just let me know and I will have someone contact you.

  3. 5 Kerry grosser May 29, 2012 at 6:31 pm

    I am questioning the Ipad situation if the employer allows packaging and youu purchase an Ipad and 75% (for example )is business use 25% personal. If you were not packaging that item but claiming it as a tax deduction you could only claim 75% as a tax deduction.You cannot claim the personal use. Most Ipads even if predominantly business use would have some personal use so how can it be accross the board that you can be reimbursed 100% and the question is not asked when making the claim how much personal use there is. How would it stand up with ATO under audit? I also presume that if its use is predominantly for study purposes like laptops it cannot be packaged as it is not being used to generate income? Thanks Kerry

    • 6 Simon Ellis May 30, 2012 at 9:37 am

      Hi Kerry

      Some good questions there and I’ll address them one at a time:

      1. The beauty of the salary packaging exemption for laptops and iPads is that you only have to meet a “primarily for use in your employment duties” test to be exempt from tax. That is, it doesn’t matter if the personal use is 25%, or even 49%; as long as the device is primarily used in the performance of your employment duties then the salary packaging opportunity exists.

      If you’re interested in the legislative background to this (and, let’s be honest, who isn’t interested in legislative background!) have a look at section 58X of the FBT Assessment Act. It spells it all out.

      2. I am 100% confident that a salary packaged iPad will stand up under ATO scrutiny as long as the business use of the machine exceeds 50%.

      3. Yes, just like with laptops, work-related study does not qualify as an “employment duty” and therefore is not sufficient for the purposes of this test. If your use of an iPad was 35% employment duties, 35% work-related study and 30% private then you would not qualify for salary packaging.

  4. 7 Kerry Grosser May 30, 2012 at 1:13 pm

    Thanks Simon and I will read 58X of the FBT assessment act!

Comments are currently closed.

Deven Billimoria
Chief Executive Officer

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