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Salary sacrificing a laptop

Discussion in 'Accounting, Tax & Legal' started by Simon, 20th Jun, 2007.

  1. Simon

    Simon Well-Known Member

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    Missus wants me to buy her a laptop shortly. She works for a hospital and can sacrifice it.

    Would I be better off buying it this financial year or in the next one? This year she will have just worked 6 months of the full year whereas next year she will work the full 12 months with a payrise in January.

    I have never been involved in salary sacrificing before and really don't understand it well so would appreciate some tips.

    Thanks

    Simon
     
  2. DaveA

    DaveA Well-Known Member

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    would depend on which year who income bracket will be, if she hadnt worked for the other 6 months then next year will probably be best as your tax rate will be higher therefore more of a deduction.... however if you have high capital gains this year or next year it might also effect it...

    your allowed one laptop per FBT year (april to march), so if you buy one laptop on 31 march and one on the 1st April, you could effectively claim both laptops as tax deductions for 364 days...

    i know the tax deductions are spread over the whole year, however im not sure when the cost "hits" your tax return, or is your gross wage each week decreased so it is effectively spread over each week...

    as ususally not advice just suggestions....
     
  3. coopranos

    coopranos Well-Known Member

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    yep whichever year she in the higher marginal rate is best

    you cant double dip and get the tax deduction as well, although you used to be able to they closed that loophole. a nurse would struggle to deduct any substantial % for a laptop anyway(unless maybe s/he takes courses duing the year), and certainly couldnt argue two

    A salary sacrafice arrangement is not a tax deduction, it is a reduction of your salary, thus reducing your taxable income. You dont include it on your tax return at all, you just enter the number on your PAYG Summary.

    Hope this helps
     
  4. DaveA

    DaveA Well-Known Member

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    i should of made myself clearer... yes i mean you can claim both of them as reductions in salary, so if you had a 60k base, it would be reduced to 54k.... (but who needs two laptops within a few days...)

    yes i agree it reduces your taxable income, it is included in your tax return via the lower gross wage...

    it is included in your group certificate and tax return under the reportable fringe benefits for things like super contribtuons and hecs payments...

    the question i had was, say if i purchased a laptop for $3000, (exl of GST), you would get a reduced salary by that much... say your on 60k again

    now if you bought on 1 January 2007, would your gross salary (for the 2006-2007 FY) be a) $58,500 or b) $57,000, this would ultimatly make your 07-08 FY gross salary (providing status quo) of $58,500 or $60,000 depending on the answer above...
     
  5. coopranos

    coopranos Well-Known Member

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    I would think that would depend on the arrangement with the employer about how the salary sacrafice arrangement would work. They may decide to deduct $60 a week from your salary to pay for it, or just not pay you until it is paid off, or perhaps if you were getting a pay rise decide to give you a laptop instead.
     
  6. Simon

    Simon Well-Known Member

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    She isn't a nurse.

    What about a Doctor undergoing registrar training? That should be easy to justify?
     
  7. coopranos

    coopranos Well-Known Member

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    very easy - IF she uses it for work purposes.
    regardless, makes no diff if she is salary sacraficing it.
     
  8. Simon

    Simon Well-Known Member

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    So the consensus is to wait until 1st of July?

    Thanks team.
     
  9. MattR

    MattR Well-Known Member

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    My understanding of the arrangements for Salary Sacrificing a Laptop are that you (the employee) are still able to claim the depreciation on the laptop, limited by your work usage percentage. Refer;

    TD 2005/D17 - Income tax: is an employee's deduction for the decline in value of a depreciating asset used for a taxable purpose affected by section 51AH of the Income Tax Assessment Act 1936, if they are subsequently reimbursed an amount for the cos

    Now another question maybe worth considering is as she works for a hospital, and assuming that its Public and therefore able to acces the FBT concessions, is she better off salary sacrificing something that she will not be able to get a tax deduction for, such as the home loan repayments? Sometimes in these situations its better to package all non-deductible expenditure and pay in after tax dollars for deductible expenses then claim them in your return, in this case via depreciation.

    Just a thought.
     
  10. Simon

    Simon Well-Known Member

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    Good thought. we have done that to the allowable limit. We didn't even have a PPOR mortgage either and had to collect all sorts of receipts!

    The laptop is on top of the limit as is a car to my understanding. But we don't need a car as I am a strong believer in buying quality second hand vehicles with no debt rather than a hugely depreciating new one!

    She wouldn't do the mileage to justify salary sacrificing a new one anyway...
     
  11. MattR

    MattR Well-Known Member

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    Yeah you're right the laptop should not come under the FBT for RBFT. So she can package it via salary sacrifice - have fun convinving the hospital though that its different from all the other expenses for FBT purposes.
     
  12. Simon

    Simon Well-Known Member

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    Another thought.

    The FY for salary sacrificing is Apr - Mar. so it should matter little whether I buy it late June or early July?

    Is this correct?

    Thanks