Fejaouk

Can anyone explain how this works? For example when I move to Australia if I want to purchase a new car pre-tax can I do this through salary sacrifice/Novated lease?

Anyone know how easy it is to get credit when newly arrived in Auz, new cars are not that much more expensive than ones a few years old!

Scottie.

Ineke

interesting topic. would like to see the responses.

TJUK

Me too and what is the deal..is it like a lease..pay monthly amount until new range arrives change mind the go thro the process again?

Geelong Gent

Depends on your employer offering
Your Gross income = £$100,000
Lease = $1000 per month ($12000)
Your employer pays the lease
The Lease payments are deducted from your Gross and you pay tax on the balance ie $88,000.

Other benefits you can add on insurance and maintenance and even petrol.
The GST is paid for by the employer so the cost is lower to you (ie they deduct the net of GST lease payment).

Issues with this
Fringe Benefit Tax - Employer is liable but often recharge the cost to the employer.
To lower the cost of FBT you need to do alot of Km's or miles. I think 25K to reduce it to single figures (the rate of which the value is calculated).

Have a look on www.ATO.gov.au

You could also search for specific companies that arrange novated leases or contact major car manfacturers if they have a consumer finance division ie Toyota Finance, Ford Credit.

Fejaouk

Queensland Health says this on their website:

"Salary sacrifice for a number of items is available. Payments towards car and home repayments can be made pre-tax and up to 100% of earnings can be sacrificed to superannuation. This option is worth approximately $9,000 gross per annum"

Donna&Neil

Yeah employee's of Qld Health qualify for $9095 p a. Depending on what you wish to sacrifice, Qld health insists you see a financial advisor to arrange it. We have just done it, a great perk for working for the gov.

ozzieeagle

It is a complicated area, as my wife is a government nurse here in Victoria, not only do they get a set amount for a mortgage (or other interest bearing debt) but they get a set amount they can deduct for meals and entertainment. IE: not only does my wife receive around that 9,000 dollar figure, but on top of that there is a claimable figure of circa upto 200 bucks per fortnight for Meals and entertainment, (she claims circa 100 bucks per fortnight presently) It looks like they get an amount for a car as well, although the jury is out on this, as none of the other Nurses my Wife works with at the Royal Melbourne have taken up the Car one. We are making enquires about it now, however it seems silly to put yourself into debt just because you are able to, and more to the point why havn't the other nurses taken up the Car deduction.


Conversely where I work at Aussie Post we can only salary Sacrifice for a laptopcomputer. Every company has different components for this, from zero right through to the level which Government health employees are able to obtain.. Now it can be a trap, inasmuch, as some people when the Computer offer first came out went out and bought 4,000 buck computers, just because they were able to claim 33pct plus tax back on the item. I waited for the dust to settle, figured out I only needed a 1,000 buck laptop computer as I already owned 2 other desktop computers and claimed accordingly

Do not get Salary Sacrificing for Super mixed up with this, as all employees under whatever banner can claim or make the same arrangments, it's a Federal issue.

quoll

According to my financial advisor, sacrificing into cars is a bit of a gamble - you have to do 25000 km to bring the FBT rate down to make it worth while and for most of us 25000km is a lot. My boss sacrificed into a car and spent weekends just driving to get the mileage up - added to that the cost of motels etc she probably wasnt much better off!!!

Employers have different things you can sacrifice for - I am just discovering the perks of working for a non profit making organization!!!!

Fejaouk

So the best thing is to get a good financial advisor? Not something most of us nurses have in the UK! I hear there are many things you can claim tax back on in Auz....so is it good financial stewardship i.e is it cost effective taking into account the cost of a financial advisor in Auz to have one to guide you on the right path in Australia?

Scottie.

bcworld

....generally I dont think its quite that simple. You pay some from gross and some from your net pay....generally a 3rd party is employed to manage your company's salary packaging needs and they will work out the numbers based on the most tax efficient solution. But definitely seek advice before entering into one of these arrangements......there can be heavy penalties, outlays if you leave your employer during the lease.

quoll

Financial advisor fees are tax deductible and generally you will pay $200 - $300 for assessment and advice. You will have to sign to say that you have spoken with a financial advisor in the process of doing a salary sacrifice arrangement IIR. I would recommend one without a doubt - we should have gone to one sooner than we did because it has made a huge difference to our ability now to retire. Even little things you can do have the potential to make a big difference later on - sacrificing into super for example.

bcworld

try this calculator for some ideas....this is the salary packaging provider my company uses....its all very confusing though. You actually package up all the running expenses as well e.g. insurance, maintanance, road taxes, even fuel. So bear that in mind when you're looking at the numbers.

https://customer.orix.com.au/wps/por...easeCalculator

Carrianne

Hi,

I salary sacrifice through work as a tax break, I used www.nlc.com.au for my novated lease. I pay one figure a fortnight and that includes the payment for my car and all over costs, including fuel, tyres servicing.

At the beginning you work out how much the car payments will be, if you want a balloon and estimate your running costs. You also have to decide how many km's you may do in a year and meet them that will depend on how much FBT you pay.


Carrianne

Geelong Gent

There are different implications on FBT for personal contributions and how your assessable income is calculated for centrelink purposes but its not rocket science and for all the time a FA gives they put the question right back at you. I personally salary sacrificed a novated lease $75K over 3 months April/May/June and performed high mileage over those months - gaining both the benefit of equivalent to annual 45K mileage and benefit of a June tax year end. I did not need a third party organisation - it was just between me my employer and the finance company ie Toyota finance.