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salary sacarafice on 40K

Discussion in 'General Investing Discussion' started by thedanman, 2nd Nov, 2009.

  1. thedanman

    thedanman New Member

    Joined:
    2nd Nov, 2009
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    Location:
    Toowoomba, QLD
    Hi,

    i earn aproximatly 40K a year and i was curious to know weather it would be worth it to salary sacarafice for a car,

    I have no idea at all please fill me in
     
  2. thedanman

    thedanman New Member

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    Location:
    Toowoomba, QLD
    im just not sure if it is worth it or not
     
  3. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    At $40K income, for the first $5,000 of deductions you get each year, you're only saving 30c in the dollar. For everything beyond that, you're only saving 15c in the dollar.

    I'm not an accountant, so I don't know the details about how salary sacrifice works in this case and what the implications are - I'll leave that up to our resident experts.

    I would think that it won't be worth while at that level of income.
     
  4. thedanman

    thedanman New Member

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    Location:
    Toowoomba, QLD
    ok thanks for ur advice on that any1 else?
     
  5. Rob G.

    Rob G. Well-Known Member

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    Melbourne, VIC
    Unlikely to be in your best interests, unless maybe your boss uses the statutory formula method and you restrict yourself to a cheap car and do heaps of kms per year AND you pay any deemed private use.

    Remember, any FBT for private use is at 46.5% which is higher than your marginal rate.

    Cheers,

    Rob