What is "salary packaging"

n. The inclusion of employee benefits in a remuneration package in exchange for giving up part of the monetary salary.

Salary packaging (also known as salary sacrifice or salary exchange) is the inclusion of employee benefits (also called fringe benefits) in an employee remuneration package in exchange for giving up part of monetary salary. Such arrangements are entered into most commonly if there are tax or other benefits to be derived by the employer or employee from the arrangement.