Budget update | Currently driving under 15,000km pa? - Case Study
The 2011-2012 Federal Budget alterations to novated leases only affects new novated leases entered into after 7:30pm on 10th May 2011.
If you previously drove less than 15,000 kilometres, you would have been taxed at 26% and your next novated lease will be taxed at 20%. The result is that you’ll receive more tax savings than ever before.
Here's a worked example of the changes you could expect to see.
Salary and vehicle details |
|
|
Car |
2011 Honda Jazz |
|
Base value of car |
$20,763 |
|
Salary |
$60,000 + super |
|
Term |
3 year lease |
|
Annual kilometres |
10,000kms p/a |
Given the car and salary details above, the table below displays the difference before and after the budget changes.
Annual payroll effect
|
No salary packaging |
Leases entered into before 7:30pm 10th May 2011 |
Leases entered into after |
|
Statutory % |
NA |
26% |
20% |
|
Gross salary |
$60,000 |
$60,000 |
$60,000 |
|
Salary sacrifice |
$0 |
-$5,194 |
-$6,327 |
|
Super |
-$4,954 |
-$4,954 |
-$4,954 |
|
Taxable income |
$55,046 |
$49,852 |
$48,719 |
|
Income tax |
-$10,889 |
-$9,253 |
-$8,896 |
|
Employee contribution |
$0 |
-$5,398 |
-$4,153 |
|
Take home pay |
$44,157 |
$35,200 |
$35,670 |
|
Cost of car |
-$11,112 |
$0 |
$0 |
|
Disposable income |
$33,045 |
$35,200 |
$35,670 |
As you can see, after the changes come into affect the savings for this particular driver segment will increase by $470.
When compared to not salary packaging, you can see that the total amount of savings in this particular instance is $2,625.
Summary
Salary |
Vehicle |
Savings
|
|
$60K |
Honda Jazz |
$2,625 |
All of the above costs include GST