[agolutuaddiff]

I have recently been offered a position in Sydney which is paying over $100k per annum.

This is about a 45k jump from what I am earning now in my 9-5 job so its a massive step up.

I have done my sums and theoretically you think I would be almost taking home twice as much per week after tax.. but due to being in the higher tax band, I am only taking home about 25% more after tax.. still not to bad but I would like to utilize this package as best as possible.

Does anyone have any tips on how I can maximise my package and reduce my taxable income to my benefit? Things like salary sacrifice, negative gearing.. etc?

Help would be appreciated!

[jadabaad]

Hiya,

Congrats on the new job

Generally speaking, the best way to save tax is to spend more money.

Something like negative gearing would achieve that for you, in a way that gives you a shot at making more money through an appreciating asset, too. Lodging a 15-15V with the tax office will then get you the extra tax back as part of your weekly wage, instead of having to wait until next year.

Salary sacrificing into super is another way to save a little tax. On the downside, though, you would have less accessable income for investing. And if you're still reasonably young, then locking the cash away in super is not good if you plan on retiring well before your sixties.

Sacrificing with car expenses and the like can also be useful, but watch out for fringe benefit implications.

When all is said and done, the key thing is to best use your income to better the lifestyle that you and your family enjoy. Be that through higher wages, clever investing or successful businesses, is up to you. It is too easy to lose sight of your goals (and I presume you know exactly what those are...?) and get distracted with concepts like paying too much tax, when taking steps to avoid such things may actually set you backwards.

Cheers

James.

[RlUbQU3R]

Hey Slade,

I posted this over at Somersoft in their tax section as I knew we should get some good answers. - Effective ways to reduce tax for a high income earner - Somersoft Property Investment Forums

Some of the most common ways to reduce tax is to spend pre tax money (salary sacrifice), or spend the money on deductible expenses .

So do you need a car for work? Maybe look into a novated lease?
what about property investment? You could always look into gearing you properties.

What are some of your goals, to have more cash in your hand at the end of the week, or start set yourself up for the future? Or both ? :P

[Thifiadardivy]

Hi Slade,

I just can't think of a better way than Super and Investment properties.

Regards Jo

[agolutuaddiff]

Hi Slade,

I just can't think of a better way than Super and Investment properties.

Regards Jo

Hey Go Jo, could you explain this a little further? sounds interesting..

[dr-eavealer]

Hey Go Jo, could you explain this a little further? sounds interesting..

Putting money into your super has 2 big advanatgaes:

1. very low tax environment - around the 10% mark
2. very strong asset protection - can not be touched by bankruptcy or any other action (other than divorce settlements)

On the down side:

1. you can't touch it until retirement age (won't matter if you are nearly there)

Investment properties are interesting for many, as Australia is one of only THREE countries in the world that allows all costs against an investment property (and incidentally any other income producing instrument) to offset your earned income.

So if your wage is $100k pa, but your investment property costs you $30k per year to own (interest payements, maintenance, depreciation, less rental income), then your TAXABLE income is $100k - $30k = $70k
Of course, the investment in the property won't make sense unless the property value goes UP by considerably more than $30k in a year!

Cheers,

The Y-man