Go Back  British Expats > Living & Moving Abroad > Australia
Reload this Page >

Car allowance or not?

Car allowance or not?

Old Sep 15th 2013, 2:52 am
  #1  
Just Joined
Thread Starter
 
Joined: Sep 2013
Posts: 4
manonthewall is an unknown quantity at this point
Default Car allowance or not?

G'd day, would be great if you guys can gimme some advice on car allowance:

Right now I'm earning:
base salary: $75000
with car allowance: $15000
with super: 6750
and commission ~20% of total salary

I have a crazy idea: Is it a good idea to ask employer to remove my car allowance from salary?
In this way, I will pay $5550 less tax right away.

When doing tax return, I estimate I can claim few thousand (maybe $4000) back because I travel with my car quite a lot for work purpose.

Furthermore, company also provides some benefit to claim $0.8/km if I travel over some distance. e.g. from Sydney to Newcastle, a return trip (360km) gives me $288. (but can I claim the same trip from both company and tax return?)

Is it complicated enough that I need to find a accountant? or you guys can help me out?

Thanks a lot!!
manonthewall is offline  
Old Sep 15th 2013, 3:11 am
  #2  
Lost in BE Cyberspace
 
Bermudashorts's Avatar
 
Joined: Feb 2009
Location: UK
Posts: 14,284
Bermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond repute
Default Re: Car allowance or not?

Comments in red.

Originally Posted by manonthewall
G'd day, would be great if you guys can gimme some advice on car allowance:

Right now I'm earning:
base salary: $75000
with car allowance: $15000
with super: 6750
and commission ~20% of total salary

I have a crazy idea: Is it a good idea to ask employer to remove my car allowance from salary?
In this way, I will pay $5550 less tax right away.

Seems pretty crazy to me but err yes you can certainly reduce your tax by asking your employer not to pay your car allowance. You could ask them to reduce your salary as well whilst you are at it and then you will pay even less tax.

When doing tax return, I estimate I can claim few thousand (maybe $4000) back because I travel with my car quite a lot for work purpose.

Furthermore, company also provides some benefit to claim $0.8/km if I travel over some distance. e.g. from Sydney to Newcastle, a return trip (360km) gives me $288. (but can I claim the same trip from both company and tax return?)

If you claim money back from your employer then no you should not be claiming it on your tax return as well. To do so is fraud.

Is it complicated enough that I need to find a accountant? or you guys can help me out?

Thanks a lot!!
Bermudashorts is offline  
Old Sep 15th 2013, 3:55 am
  #3  
Just Joined
Thread Starter
 
Joined: Sep 2013
Posts: 4
manonthewall is an unknown quantity at this point
Default Re: Car allowance or not?

Thanks.

but if removing car allowance leads to the fact of lower tax, more $$ refund from gov / company provided that there is no fraud, ie. earning more than the car allowance, then it's not crazy.

Just wanna see if i overlooked anything.

I believe novated lease is also an option
manonthewall is offline  
Old Sep 15th 2013, 5:22 am
  #4  
Concierge
 
spouse of scouse's Avatar
 
Joined: Jan 2013
Location: Western Australia
Posts: 21,100
spouse of scouse has a reputation beyond reputespouse of scouse has a reputation beyond reputespouse of scouse has a reputation beyond reputespouse of scouse has a reputation beyond reputespouse of scouse has a reputation beyond reputespouse of scouse has a reputation beyond reputespouse of scouse has a reputation beyond reputespouse of scouse has a reputation beyond reputespouse of scouse has a reputation beyond reputespouse of scouse has a reputation beyond reputespouse of scouse has a reputation beyond repute
Default Re: Car allowance or not?

Originally Posted by manonthewall
Thanks.

but if removing car allowance leads to the fact of lower tax, more $$ refund from gov / company provided that there is no fraud, ie. earning more than the car allowance, then it's not crazy.

Just wanna see if i overlooked anything.

I believe novated lease is also an option
You need an accountant. Novated leases offered through your employer have FBT implications. Nothing stopping you declining the car allowance, but you'd have to do an awful lot of travelling to make up the nine and a half grand you'll lose in salary - remembering that if you claim a per kilometer allowance from your employer or the ATO (not both, as pointed out, that's double dipping and fraud), you will have actually expended funds from your own pocket in order to receive this allowance (petrol, portion of rego, insurance, maintenance etc etc)

I wouldn't even consider what you're contemplating, but it's up to you.
spouse of scouse is offline  
Old Sep 15th 2013, 7:20 am
  #5  
Lost in BE Cyberspace
 
ozzieeagle's Avatar
 
Joined: Feb 2005
Posts: 15,526
ozzieeagle has a reputation beyond reputeozzieeagle has a reputation beyond reputeozzieeagle has a reputation beyond reputeozzieeagle has a reputation beyond reputeozzieeagle has a reputation beyond reputeozzieeagle has a reputation beyond reputeozzieeagle has a reputation beyond reputeozzieeagle has a reputation beyond reputeozzieeagle has a reputation beyond reputeozzieeagle has a reputation beyond reputeozzieeagle has a reputation beyond repute
Default Re: Car allowance or not?

Originally Posted by spouse of scouse
You need an accountant. Novated leases offered through your employer have FBT implications. Nothing stopping you declining the car allowance, but you'd have to do an awful lot of travelling to make up the nine and a half grand you'll lose in salary - remembering that if you claim a per kilometer allowance from your employer or the ATO (not both, as pointed out, that's double dipping and fraud), you will have actually expended funds from your own pocket in order to receive this allowance (petrol, portion of rego, insurance, maintenance etc etc)

I wouldn't even consider what you're contemplating, but it's up to you.
I know that Government medical employees, nurses etc, usually pick meals and entertainment salary packaging over novated leases, because of that 9.5K I think. They definitely have both options.

Not sure whether you can choose Meals and Entertainment in your case or not.... very useful for takeaway food and pub meals etc etc.


In fact I dont know of one Nurse thats taken a vehicle over meals and entertainment.
ozzieeagle is offline  
Old Sep 15th 2013, 7:40 am
  #6  
BE Forum Addict
 
Joined: Apr 2012
Posts: 1,603
RedDragon2008 has a reputation beyond reputeRedDragon2008 has a reputation beyond reputeRedDragon2008 has a reputation beyond reputeRedDragon2008 has a reputation beyond reputeRedDragon2008 has a reputation beyond reputeRedDragon2008 has a reputation beyond reputeRedDragon2008 has a reputation beyond reputeRedDragon2008 has a reputation beyond reputeRedDragon2008 has a reputation beyond reputeRedDragon2008 has a reputation beyond reputeRedDragon2008 has a reputation beyond repute
Default Re: Car allowance or not?

Originally Posted by manonthewall
When doing tax return, I estimate I can claim few thousand (maybe $4000) back because I travel with my car quite a lot for work purpose.

Furthermore, company also provides some benefit to claim $0.8/km if I travel over some distance. e.g. from Sydney to Newcastle, a return trip (360km) gives me $288. (but can I claim the same trip from both company and tax return?)
I think you may need to be aware that the mileage allowance is limited to 5000 km's per year.

Just in case your thought was to claim this every week of the year
RedDragon2008 is offline  
Old Sep 15th 2013, 11:03 am
  #7  
Concierge
 
spouse of scouse's Avatar
 
Joined: Jan 2013
Location: Western Australia
Posts: 21,100
spouse of scouse has a reputation beyond reputespouse of scouse has a reputation beyond reputespouse of scouse has a reputation beyond reputespouse of scouse has a reputation beyond reputespouse of scouse has a reputation beyond reputespouse of scouse has a reputation beyond reputespouse of scouse has a reputation beyond reputespouse of scouse has a reputation beyond reputespouse of scouse has a reputation beyond reputespouse of scouse has a reputation beyond reputespouse of scouse has a reputation beyond repute
Default Re: Car allowance or not?

Originally Posted by ozzieeagle
I know that Government medical employees, nurses etc, usually pick meals and entertainment salary packaging over novated leases, because of that 9.5K I think. They definitely have both options.

Not sure whether you can choose Meals and Entertainment in your case or not.... very useful for takeaway food and pub meals etc etc.


In fact I dont know of one Nurse thats taken a vehicle over meals and entertainment.
Cheers Ozzie, I didn't know that.
spouse of scouse is offline  
Old Sep 15th 2013, 11:00 pm
  #8  
Frequent Flyer Member
 
bcworld's Avatar
 
Joined: Jun 2007
Location: Melbourne
Posts: 10,994
bcworld has a reputation beyond reputebcworld has a reputation beyond reputebcworld has a reputation beyond reputebcworld has a reputation beyond reputebcworld has a reputation beyond reputebcworld has a reputation beyond reputebcworld has a reputation beyond reputebcworld has a reputation beyond reputebcworld has a reputation beyond reputebcworld has a reputation beyond reputebcworld has a reputation beyond repute
Default Re: Car allowance or not?

Originally Posted by RedDragon2008
I think you may need to be aware that the mileage allowance is limited to 5000 km's per year.

Just in case your thought was to claim this every week of the year
Also, and it may not be the case in the OP's company, sometimes when a car allowance is offered but not taken there is a far lower per km reimbursement offered. Although I think the difference between the rate paid and the ATO max is deductible at tax time?
bcworld is offline  
Old Sep 15th 2013, 11:25 pm
  #9  
Just Joined
Thread Starter
 
Joined: Sep 2013
Posts: 4
manonthewall is an unknown quantity at this point
Default Re: Car allowance or not?

thanks mates. seems all of you think my idea suck
manonthewall is offline  
Old Sep 16th 2013, 1:47 am
  #10  
Concierge
 
spouse of scouse's Avatar
 
Joined: Jan 2013
Location: Western Australia
Posts: 21,100
spouse of scouse has a reputation beyond reputespouse of scouse has a reputation beyond reputespouse of scouse has a reputation beyond reputespouse of scouse has a reputation beyond reputespouse of scouse has a reputation beyond reputespouse of scouse has a reputation beyond reputespouse of scouse has a reputation beyond reputespouse of scouse has a reputation beyond reputespouse of scouse has a reputation beyond reputespouse of scouse has a reputation beyond reputespouse of scouse has a reputation beyond repute
Default Re: Car allowance or not?

Originally Posted by manonthewall
thanks mates. seems all of you think my idea suck
We're good at tough love
spouse of scouse is offline  
Old Sep 16th 2013, 5:46 am
  #11  
Just Joined
Thread Starter
 
Joined: Sep 2013
Posts: 4
manonthewall is an unknown quantity at this point
Default Re: Car allowance or not?

Originally Posted by spouse of scouse
We're good at tough love
good to be loved!
manonthewall is offline  

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service -

Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.