Salary Sacrifice - Help!!!!!
#1
Forum Regular
Thread Starter
Joined: Jan 2007
Location: Melbourne
Posts: 34
Salary Sacrifice - Help!!!!!
I'm trying to get my head around salary sacrifice.
EG if you can sacrifice say $15k to get a company car does this comes off your gross salary? In other words are you then only taxed on the net (after sacrifice) salary left?
Any help appreciated.
Craig
EG if you can sacrifice say $15k to get a company car does this comes off your gross salary? In other words are you then only taxed on the net (after sacrifice) salary left?
Any help appreciated.
Craig
#2
Re: Salary Sacrifice - Help!!!!!
With cars you normally end up with a "novated lease". A company buys the car for you (or buys your existing one). They also give you a card to buy fuel with, pay for rego, servicing etc. You tell them how many miles you are likely to do and they then tell you what monthly payment you will need to make. The amount gives them a profit but means you only pay them the net of tax amount.
#3
Re: Salary Sacrifice - Help!!!!!
Hi Craig
With salary sacrifice It would usually be from your gross but your employer may have set up your award differently so you need to confirm with them
With salary sacrifice It would usually be from your gross but your employer may have set up your award differently so you need to confirm with them
#4
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Joined: Jan 2007
Location: Melbourne
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Re: Salary Sacrifice - Help!!!!!
Craig
#5
Re: Salary Sacrifice - Help!!!!!
But with something like a car, you may also end up liable for fringe benefits tax. So you get taxed for having had the advantage of getting the salary sacrifice bit pre tax. The FBT is lower than normal income tax and is also influenced by factors like distance. Mine is less if I do 25000 kms a year (I think). Less again for 40k (or something).
Cheers,
DagBoy
Cheers,
DagBoy
#6
Forum Regular
Thread Starter
Joined: Jan 2007
Location: Melbourne
Posts: 34
Re: Salary Sacrifice - Help!!!!!
But with something like a car, you may also end up liable for fringe benefits tax. So you get taxed for having had the advantage of getting the salary sacrifice bit pre tax. The FBT is lower than normal income tax and is also influenced by factors like distance. Mine is less if I do 25000 kms a year (I think). Less again for 40k (or something).
Cheers,
DagBoy
Cheers,
DagBoy
Ta for reply
Craig
#7
Re: Salary Sacrifice - Help!!!!!
Cheers,
DagBoy
#8
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Location: Offices in Melbourne, Brisbane, Perth, Geelong (Australia), and Southampton (UK)
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Re: Salary Sacrifice - Help!!!!!
FBT is payable by employers, not by employees.
However, the arrangement with the employer might be that the FBT paid by the employer is deducted from the employee's gross pay, so the cost to the employer is neutral ...
Best regards.
However, the arrangement with the employer might be that the FBT paid by the employer is deducted from the employee's gross pay, so the cost to the employer is neutral ...
Best regards.