CasG

How much is it worth - ratio/%

Cheers

joho

if the money quoted is for eg 100k package, that would incude a 9% pension. If it says 100k + super then it would 100k wages plus 9k(9%) to your super (pension)

Jo

CasG

I was of thinking about the tax issue as well .....so that because they don't tax X?? amount...what you get in your pocket is more
Do you get my drift...??

Because if you do...then you are wiser than me


I've worked here for a while, but never been offered Salary packaging up to now..

Nicstids

I've just started work as a Trainee Financial Adviser and for my sins the first subject I have to look at is Salary Packaging

That's not to say that I understand it

You're a nurse aren't you? In QLD that means that you would be able to package up to $17,000 as QLD Health is a PBI (Public Benevolent Institution) Not sure about Victoria though......Basically you are able to pay for items out of your gross income rather than out of your taxed income which means that you will be better off and have more money in your pocket.

Tax wise it's a good thing to get into - you can package all sorts of things including super, cars, mortgage, rent payments, laptops etc etc

The firm I work for charges a fixed fee to advise on salary pakaging and that fee can also be packaged as part of the deal.

I would recommend that you speak to a financial adviser - the lady I work for has picked up a lot of business from nurses recommending her - see if anybody can recommend an adviser local to you

Bix

Not at all sure about this one Cas but I thought 100%.

Only certain things are allowable but I thought they came off your pay 100% before tax was applied.

So for example payments into Super, computer cost, car costs come off your gross pay before the tax is calculated.

Bix

Ooooo.....Nic posted while I was typing my reply.

CasG

Thank you...yep..you have me correct

Sounds good and worthwhile !

So what sort of percentage gain are we looking at??

Bix

That will depend on what you are allowed to package I guess.
If you were allowed to package the max $17000 then effectively your taxable income reduces by that amount.

What's left is subject to the usual ATO tax bands.

Nicstids

Can I wimp out and say every case is different and it depends
The lady I work for does a "without packaging" calculation and a "with packaging" calculation so you can see if it's worth it. For example, with a car, the higher the mileage you do, the more you save.

It really is quite complicated to work it out (it's doing my head in ) and not every financial adviser/accountant knows what they are doing. Definitely worth asking around for a recommendation.

This is the company that administers QLD packaging arrangements
http://www.remserv.com.au/
Might be worth asking who does it in Victoria and see if they have a list of financial advisers

NIGENABBY

One thing to be careful of is FBT (fringe benefits tax), I don't know about all hospitals, but I know at least some are exempt. (I am assuming you are going to work for one as someone mentioned you are a nurse)

If the organisation you work for is not packaging up too many things can be not worth the effort. Your employer pays the FBT, but most will factor the cost into your package.

Just something else to check before ploughing in.
Regards
Abby

Nicstids

Here's an example from the Remserv site assuming you earn $45,000 and want to package $6000 mortgage payments - you'll see you save $1650 in that instance

http://www.remserv.com.au/Calculator...6=&Pay6=&Nov6=

annqldau

Simplest thing to me seemed to be bang it all on the mortgage so that's what I've done as don't want to retire at 70.

If you are a nurse it's fairly simple and the financial Advisor does all the work. You have to see one anyway for the initial set up.

ozzieeagle

This answer is on the right track Cas.... It's because the Public hospitals are free from fringe benefit tax or something.... Even people that have been in it for years don't really understand the limitations of it. As you will get different answers from everyone.

I do know the full benefits kick in when you work Full time and permantly for the public hospital system.... I beleive its worth at least 33pct extra on your take home wage, as thats the amount you are able to allocate and the higher ratio of tax doesnt kick in until circa 75,000 Aud.

So say you earn 70,000 Aud... you allocate about 22,000 dollars towards your mortgage.... you pay no tax on that portion of your money, thus raising your take home income by 33 pct in the dollar on that portion leaving you with a taxable income of 48,000 dollars.... that 48,000 is also fully tax deductable with normal deductions.


Sorry thats as close as I can get to explain it. It's worth about 400 bucks per fortnight to my wife. on circa 60,000 per year. IE: other people that dont work in public hospitals or charitable institutions cannot salary package at this level, including myself at the post office. Because of the special exclusion of tax in fringe benefits allocate to these organisations.




The figures are about right though

jayr

I don't know about the nurses being free of Fringe Benefits Tax thing but for others lokking to slary package, you need to be aware of ehther or not FBT applies to goods and at what level FBT applies.

For example, you are allowed to salary sacrifice/package a laptop computer once a year and this is FBT free. If the computer is say $2000 and your normal marginal tax rate is say 42% you would have 'normally' paid $2000 out of after-tax income for the computer. If salary sacrificed you buy it out of pre-tax income saving basically 42%.

Many items still attract FBT at 48.5%, that is it can be UNECONOMIC for lower rate taxpayers to package some items.

Cars are more complicated again where certain parts of the car pacage like petrol and maintenance are FBT free and the car lease payment is subject to FBT but the rate depends on annual mileage.

For most people, sacrficing a car still makes sense, it is just less attractive than it used to be.

BadgeIsBack

"So that's great news for health professionals then. After the ad break, , Johny Howard - friend or foe?"