jimbo1982

Hi Guys,

I am getting on a flight in 2 weeks to come to Oz so I am really excited.

I am on a 457 visa for 4 years but looking to go perm when I can.

I could really do with some advice on salary packaging. Basically I am on a base of $80k + Super. My company have offered the Living Away From Home Allowance and a Novated Lease for a car. I love the tax benefit to this but wanted to know what the maximum I can put on both would be. I have heard there is a minimum salary requirement. In my mind I would like to spend around $40,000 per year on rent and a car. Would I get away with this much salary sacrifice????

Also, is it better to get a car on finance or via a novated lease?

All help would be great as I need to get things sorted as soon as I can as I start work 5 days after arriving.

Thanks

Geelong Gent

LAFH is not dependant on what you spend but on what the company determine is suitable for your position. I think it would be difficult to argue 50% being suitable. The argument is with the ATO by the way of which the company will need to prove too that the figure is suitable (sorry forget the exact wording, but along the lines of a junior exec living in $10k per month mansion is deemed unsuitable whereas president of the company it is)

Novated lease will need consideration of:
Your expected mileage or km's
Your companys policy on recharge of FBT and whether your company is exempt in the first place from FBT.
Your out of pocket runnings expenses for the car ie servicing, petrol, insurance etc.

Most people try to put down as much mileage as possible to reduce FBT (its completely absurd but its more tax efficient the more mileage you do)
The downside of this is the lease becomes more expensive as the residual value is reduced based on higher mileage vehicle at end.

Dependant on what you need the vehicle for (ie sales rep or on t
he road type work) most companies find its not in the employees interest below $80k to have a novated lease. Last few clients dont allow staff below $100k.

Lastly think very carefully about the financial committment beyound the employer. On a 457 you are still temporary and if you had to leave could you pay out the lease before leaving?

jimbo1982

Wow. That is food for thought.

I am a little concerned on the rent front. From what I can see $2,000 per month seems to be the right amount for the places I am looking at. Does this sound excessive?

On the car front what do you think the best option would be for me? I will be doing around 10-15km per year in mainly work miles. Is there a flexible lease or another option that beats the novated lease?

I really appreciate the help. This will have a big impact on what I am looking to get.

juddy

We packege up to the max, which i belive is 17k per year. The mortgauge is a really good idea, however be carefull on the car front, if you want to get out of the deal early it will cost you alot of money, stay in it and its good...