We have a habit of waxing lyrical about the ol’ pre-tax. We can’t help it! Pre-tax (or before-tax) is inextricably combined with the potential financial benefit that all our customers enjoy – and it’s why salary packaging is such an attractive option for hundreds of thousands of Australians.

Generally of course, people just want to set up their account and get on with things. That’s fine, but we believe it’s important to understand some of the key concepts of salary packaging and there is no bigger, more important one than pre-tax.

Pre-tax refers to gross income

Imagine your gross fortnightly pay, untouched by tax, sitting with your payroll. Let’s say it’s $1,000 (after super is removed).

For mere mortals (people who can’t salary package), tax is applied to the full $1000 and the remaining net figure is paid to their bank account.

Pre-tax is money that is taken from your gross pay before it is taxed.

So, Maxxia swoop in heroically on your behalf and let’s assume that we take $500 from your pre-tax income pay for your benefits, maybe your mortgage, or your Maxxia Wallet (if you have one).

Payroll now only has $500, and this is what you are taxed on.

Instead of $1000 you are only taxed on the remaining $500.

At its most basic, this is what salary packaging is all about.

So pre-tax is kind of awesome.

We’re here to help

We believe that the more our customers understand the wonderful world of salary packaging, the more informed their decision will be and the more benefit they may be able to unlock!

Read more about the basics of salary packaging here.

To find out if you’re eligible, speak to your employer, get in touch online, or give us a call on 1300 123 123.