Salary Sacrifice or Claim Tax over Time?

kongkee on 30/08/2021 - 16:57

I'm just wondering how much which is cheaper to do.

So for example I'll buy an office chair worth 2,000 AUD.

At work they can do a salary sacrifice and get it for 40% off = so I will pay around 1200

or is it cheaper to buy it claim tax at the end of the financial year? It's more than 300 so it'll have to be depreciated value, can somebody explain it to me how this works over the next financial years? I'll use it for 70% work. So on the first year I can claim about 300 at the most. Next year how much can I claim? And the year next?

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Comments

  • stratbargain on 30/08/2021 - 17:06

    Salary Sacrifice is almost always the best way as you recognise the benefit almost immediately. But some companies will charge a fee (I think ours charges $40 per claim).

    • kongkee on 30/08/2021 - 17:31

      Thanks for the reply. I don't really mind If I don't get the discount back immediately, I don't mind claiming tax on it for the next 3 years. I just want the cheapest. SS is free at our work.

  • Pelicannn on 30/08/2021 - 17:22
    +1

    You also don’t pay GST when salary sacrificing right? So that’s another saving.

    • stratbargain on 30/08/2021 - 17:23

      Yep you're right. Another benefit.

      • netjock on 30/08/2021 - 17:46

        But check if item is more expensive.

  • Pelicannn on 30/08/2021 - 17:26

    I salary sacrifice my phone bills at the same time I do my tax return, and just send in my previous 12 phone bills for the year.

    It works out better as I can claim the full cost and don’t pay GST, whereas if I’d claimed it on tax, I can only claim the work portion which might only be 60-70% of the cost.

    I will try salary sacrifice as much as I can.

    • kongkee on 30/08/2021 - 17:33

      My phone bills are covered 100% at work too.

      Although the max salary sacrifice I can do at work is 40%. So what's the most I can save on 2k chair if I claim tax benefit? I don't mind doing it over the years as long it's cheaper.

      • redfox1200 on 30/08/2021 - 17:59

        what ever your tax rate is

      • us3rnam3tak3n on 30/08/2021 - 18:07

        If your taxable income is over 180k then your marginal rate is 45%. If it's between 120k and 180k then it's 37%. Including the medicare levy these become 47% and 39% so it depends whether you fall into the 180k+ bracket or not.

  • pharkurnell on 30/08/2021 - 19:41
    +2

    I couldnt get past "an office chair for 2,000aud"……

    • kongkee on 30/08/2021 - 21:06
      +1

      It’s a Herman Miller Aeron fully loaded. I’d say it’s worth it especially if you have a sedentary job like me. Also it’s covered for 12 years. They would last more than 12 years. It’s a buy it for life kinda thing and less wastage for environment since you only own one chair and don’t have to keep changing. And of course they’re very ergonomic. Those things are worth for me. Different for everybody.

  • Laurana on 30/08/2021 - 20:28

    Unless your work charges a fee for you to salary sacrifice, or if it’s not one of the exempt benefit items (I.e if you have to pay fringe benefits tax on the item), then it’s almost always better to do it through work as you can claim it all in one year (instead of depreciating it) and save on the GST portion of the item.

  • PR0r on 30/08/2021 - 21:09
    -1

    How about an officeworks chair for $100 and forget the headache

    • kongkee on 30/08/2021 - 22:37

      Rather headache than backache

      • PR0r on 31/08/2021 - 06:04
        -2

        I'd rather spend my 2k on anything but a chair

        • kongkee on 31/08/2021 - 08:22

          Yup that’s your money.

  • foxmulder on 31/08/2021 - 18:57

    How does company paying you for a chair is a salary sacrifice? Salary sacrifice tied to putting money in your super. Buying chair is more like a fringe benefit?

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