Home / market news / Salary sacrifice option can cut tax liability
nc efi placeholder 660x330 - Salary sacrifice option can cut tax liability

Salary sacrifice option can cut tax liability

[ad_1]

I am a married woman aged 68 and work part time earning $483 per week, paying $31 in tax. I have no debt on a property that I manage and rent out for $370 a week. My husband fully owns the home we live in. He has an annual income of $21,000. If I salary sacrifice up to, say, 75 per cent of my weekly wage, adding in also employer contribution of $2,400 to the allowed $25,000, would I minimise my tax debt? I realise that 15 per cent contributions tax into superannuation would be levied, however, the remainder of my wage should not attract tax. My tax obligation for this past financial year is $3,223, not including the tax paid on wages last financial year. I would appreciate your advice on this. When I asked my accountant about it I am sure she did not comprehend my query.

Based on the figures you have provided, your taxable income should be about $40,000 a year after investment property outgoings.

gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw== - Salary sacrifice option can cut tax liability

Illustration: Simon LetchCredit:

Therefore, if you made a personal concessional tax-deductible contribution to super of, say, $22,000, you would reduce your taxable income to below the tax-free threshold of $18,200 and wipe out any tax liability.

As you point out, there would be a 15 per cent tax on that contribution, but you would still be in front. Also, you would be boosting your super. Because of your age, there is no fear of lack of access.

[ad_2]
Source link

About Noel Whittaker

Leave a Reply

Your email address will not be published. Required fields are marked *