I'm relatively new to Australia, and in particular to the tax system. It appears from my limited understanding that once per year you can sacrifice salary for a laptop, with no FBT payable. This appears to mean I could buy a laptop with my pre-tax salary (so, assuming I'm on 30% tax rate, that is like a 30% discount). Do any of you know if my understanding is correct, and/or if there are any requirements or other implications? I had a good look at the ATO webpage but couldn't find detailed information. Maybe some of you have had first hand experience?
Salary Sacrifice for laptop?
LEvil-Elmo on 14/02/2008 - 00:35
Comments
Yep, the short answer is yes. In my experience, generally your employer can assist you with this scheme.
Yep - your employer can assist you with the scheme & you might get a better deal because of that.
Okay the way it worked with my previous employer is - you buy a laptop with ur own money give them the invoice and they give u a cheque back for the same amount. your annual salary(before tax) is reduced by the cost of the laptop(-gst) and you are paid monthly accordingly. as far as i am aware, this dosent cost ur employeer anything
now, the great thing about this is your employeer doesnt care how you paid for the laptop, as long as u paid for the laptop. when i purcahse my macbook from david jones, i got it on 24 months interest free. but when i gave the invoice to my employeer i got the cheque for the money imnmediately. i then used this cheque to pay of the remainder of my car loan. so in a way, i got my car loan 24 months interest free and had my laptop being paid from my pre tax income.
a good example on how this works :
Employee A earns $50,000 per annum.
Employee Purchases Lap Top $3,300 (including $300 GST)
Process
Employee is refunded $300 GST and $3000 laptop cost
PAYG tax is then calculated on the employees pre packaged gross salary less the cost of the computer ($50,000 less $3,000 = $47,000).Therefore Employee A has a reduction in their fortnightly tax, this is received over the next 26 pay periods.
Please check with ur accountant on the exact workings.
There is normally an annual limit of 1 laptop yearly. if you use your car for work, your employeers will allow u to salaray sacrifice ur car as well
EDIT : Edited to make more sense
Excellent, thank you for your replies. I will discuss it with my empoyer, maybe closer to the new financial year. If they haven't done it before they may be a bit hesitant to consider it as it would require additional accounting than otherwise… however, it sounds like it's still worth trying :)
I think you are correct — buying laptop in Australia is much cheaper than buying a desktop for some of us because you don't pay FBT on it, for now (can't work out the logic why laptops but not desktops), and you can do it once a year! Same applies to PDA I think. Best to ask an accountant though. I am just a lowly software engineer :)