Companies and Executives Are Wrong on Higher Paid Jobs

random12 on 26/11/2024 - 01:33
Last edited 26/11/2024 - 01:41

Talking about jobs that pay more than 200k.

Why do people keep working these jobs. The top marginal tax rate of 47% kicks in at 190k. Once you earn 190k, you are far better off working less hours for the the same pay, rather than working the same hours for more pay. What matters most is pay per hour.

I realise there are some challenges. It's hard to negotiate a reduction in hours for the same pay, because everything revolves around a 38hr week. But think about it. You could split up a single $1m job into 5 separate jobs that pay 190k each. Yes, maybe there is a bit of problem with sharing information between people. [ It's probably bit hard to have a company where there is a different person playing CEO each day Monday - Friday ]. Also, if everyone did this on mass, then the government would loss so much tax, and would have to increase rates on everyone to get the same dollar amount.

But so many ATO slaves. Like having a million dollar salary is not really a flex. You spend every Tuesday - Friday working basically 50% for the ATO. The goal should be to get to 190k (or whatever amount is comfortable for you) as fast as possible, and then stop. They tax your earnings, they don't tax your free time.

Thinking about it, the only true fair way would be to tax based on per hour pay. But then people would try and game and get around that.

Key is to get per hour executive rates, but work less hours.

Education & Work

closed Comments

  • Astrom on 26/11/2024 - 02:20
    +8

    Thats generally why people earning higher incomes invest in property and other things that let them claim losses against their income, so they dont lose the extra dollars to taxes.

    Also they are still earning more money overall even if the marginal tax rate is increased once they pass the threshold.

  • Italkdigital on 26/11/2024 - 02:26
    +1

    How can anyone be wrong on higher psid wages,..

    Show me the money lolz 😆

  • happydude on 26/11/2024 - 03:19
    +23

    Oh dear god, you're back. I'm now officially convinced this is a troll account.

    My only thought is to quote Billy Maddison:

    At no point in your rambling, incoherent response were you even close to anything that could be considered a rational thought. Everyone in this room is now dumber for having listened to it. I award you no points, and may God have mercy on your soul

    • Crow K on 26/11/2024 - 09:40
      +5

      For those new to this phenomenon, you are highly encouraged to read some of OP's posts on how annual leave payments work, whether waiters take water bottles away from your tabletop too soon and whether there's enough KFC chips in a bag

      The annual leave one is the most relevant one to this discussion because it was a cascade of

      Random12: so I know all about how annual leave and tax and accounting works and it's like this
      Dozens of people: that isn't correct, and here's a patient explanation of why
      Random12: I am in Broadcast mode not Receive, now to repeat things I previously said

      Crow K on 26/11/2024 - 09:40 (Collapsed - Offtopic. Show)
      • random12 on 26/11/2024 - 10:52
        -1

        Good to know there are troll shit posters like you that exist purely to troll through past post and bring them up. I’m reporting you, hopefully mods ban you.

        • Crow K on 26/11/2024 - 10:55
          +1

          honest questions: is repeating subjects you've made in the past a form of trolling now?

          Under what circumstances would someone be allowed to refer to your past posts?

          • random12 on 26/11/2024 - 10:58
            -1

            @Crow K: Your whole comment was off topic post. You think ur smart bringing up shit like KFC. Even the other stuff you mention is off topic troll. You think you’re funny. You’re not. Hopefully mods ban you.

            • Crow K on 26/11/2024 - 11:11

              @random12: Unless your argument is "by encouraging users to read previous random12 posts, you are actively ruining their online experience and harming them" (which might very well be the case), I'm not sure it would be trolling, though?

            • sim777 on 26/11/2024 - 11:12
              +1

              @random12: I found it funny

            • happydude on 26/11/2024 - 11:40

              @random12: I spent a lot of time trying to get through to you about how leave balances are a liability.

              You didn't want to listen then, and I suspect you don't want to listen now.

  • Fredfloresjr on 26/11/2024 - 05:26
    +1

    Not to brag, or anything.

    My life is better with 180k+ than my previous 140k+. So don't worry about others haha

    I'll tell you, people that relies 100% with DOLE has better life than us working people. LOL

    • mskeggs on 26/11/2024 - 08:01
      +4

      Why don't you go on welfare or drop down to earning $15k p.a if the lifestyle is better?

      • lucas deals on 26/11/2024 - 09:18
        +2

        I think they were being sarcastic.

  • JIMB0 on 26/11/2024 - 06:10
    +8

    Why not stop at $18,200 and pay no tax at all?

    • random12 on 26/11/2024 - 07:10
      -6

      I thought bout stopping at lower thresholds. Just that the top one is likely most appropriate for anyone running a business. They say that CEOs earn 20k per day. If that's the case, smartest is to work 10 days, and then stop. But it's hard to get to job that will let you work 10 days a year.

      • altomic on 26/11/2024 - 09:08
        +5

        Were you dropped on the head as a baby?

      • CodeXD on 26/11/2024 - 09:20
        +3

        I thought

        Not your strong suit.

    • random12 on 26/11/2024 - 10:55

      Because no one can reasonably live on 18k?

      You think I didn’t realise that the logic could be applied to basically any tier? I did a mathematics degree at uni. I’ve thought of it before kiddo. Notice how I had “(or whatever amount is comfortable for you)”.

      Heard of a strawman?

  • joka on 26/11/2024 - 06:21
    +4

    People on high incomes often pay less in taxes as a percentage than average income people.

    • LanceVance on 26/11/2024 - 10:03

      Not if they're employees.

      • joka on 26/11/2024 - 11:33

        Irrespective if they are employees or not. Work related tax dedications, renovations, additional super contributions, salary sacrificing, vehicle expenses… these are all tools to assist with tax minimisation (not to be confused with tax avoidance).

  • SBOB on 26/11/2024 - 06:43
    +5

    Why do people keep working these jobs. The top marginal tax rate of 47% kicks in at 190k.

    Using this 'hot take' argument, why bother working for more than $135k. You give away 37% for every $ over 135k.

    negotiate a reduction in hours for the same pay,

    Your ideas are intriguing to me, and I wish to subscribe to your newsletter

    • random12 on 26/11/2024 - 07:12
      -4

      I thought bout stopping at lower thresholds. Just that the top one is likely most appropriate for anyone running a business. They say that CEOs earn 20k per day. If that's the case, smartest is to work 10 days, and then stop. But it's hard to get to job that will let you work 10 days a year.

      • May4th on 26/11/2024 - 07:29
        +1

        chances are those with this mentality and work ethic will never make it to that level/salary anyway

        • random12 on 26/11/2024 - 08:15

          Ah no, a smart person would think that way.

          • May4th on 26/11/2024 - 08:28

            @random12: i don't disagree I personally would work less, but you don't get to CEO level taking it easy where you can. you also earn a lot more than 200k + stock/options so it's usually more 140k vs 400k -millions not 140k vs 180k

  • ddilrat on 26/11/2024 - 06:47
    +2

    Just be glad there are people paying more tax than you so you can benefit from it

  • try2bhelpful on 26/11/2024 - 06:59

    Everyday, in every way, I see why subjects like clear thinking are badly needed in our schools nowadays.

    • random12 on 26/11/2024 - 07:07
      -2

      u never live up to your username

      • try2bhelpful on 26/11/2024 - 07:11
        +9

        In this case I really do.

        • holdenmg on 26/11/2024 - 07:19

          As opposed to the OP that merely followed random11

          How predictable.

  • May4th on 26/11/2024 - 07:27
    +3

    this might be surprising but some people actually enjoy their jobs or find meaning in what they do
    and most people don't get the option of cutting down to what hours suit them. so if you are working 38hrs regardless why would you not strive for a higher salary?

  • ihfree on 26/11/2024 - 07:39
    +1

    Your post seems to be pure copium.

    CEOs are often paid with options. There are also various methods used by the wealthy to avoid tax.

  • ihbh on 26/11/2024 - 08:06

    But so many ATO slaves. Like having a million dollar salary is not really a flex. You spend every Tuesday - Friday working basically 50% for the ATO.

    Trying to see it from their perspective:

    • Earn $1/2-1m p.a.; retire at 65 with $3+m in super - Bob's your uncle. Many can retire early.
    • $300k net is better than $75k net, even if nearly 50% goes to the ATO. Who gives a f**k what the ATO gets; it's what you keep that counts.
    • Corporate travel, conferences, other perks.
    • Many have family trusts to split investment income with their spouses
    • They enjoy the work - strategic thinking, leadership, power, etc.

    Having said that, if the top MTR went to 90%, there will probably be some drop off in income after - perhaps substituted in other ways.

  • pegaxs on 26/11/2024 - 08:10

    Yeah, people on $190k+/year are not paying 47% tax… if they are, then they need to sack their accountant and their financial advisor.

    • random12 on 26/11/2024 - 08:14
      -2

      Well then why publish a rate if it is supposed to be avoided?

      • altomic on 26/11/2024 - 09:04
        +5

        So that people who have no clue will post forum posts about it on Ozbargain

      • joka on 26/11/2024 - 11:34

        I think you mean "tax minimisation". Tax avoidance is illegal, please don't do that.

    • May4th on 26/11/2024 - 08:27

      plenty are, the salaried middle class shoulder most of the tax burden in aus. all your professional services eg. financial/legal/medical etc few tax breaks for them apart from the much maligned negative gearing

  • MrThing on 26/11/2024 - 08:27

    Im happy just being on the dole

  • original15 on 26/11/2024 - 08:41
    +2

    The top 10% of earners pay 55% of ALL income tax
    The top 1% of earners pay 17% of ALL income tax

  • brad1-8tsi on 26/11/2024 - 09:17
    +4

    I don't think you understand Australia's tiered tax system.

    Tax on 189k is $129903 in the pocket or 31.5% tax.

    Tax on 191k is $130963 in the pocket or 31.6% tax

    Tax on 249k is $161303 in the pocket or 35.2% tax

    No matter how you look at it, more pay = more money in the pocket.

    • May4th on 26/11/2024 - 09:23
      +1

      this. also while you get less money per dollar >180k, the extra effort to go from 180-240k gross is usually a lot less than 0 to 180k, and you are investing for career progression. no one ever gets promoted or to position of a executive working part time

      • apu on 26/11/2024 - 09:37
        +2

        Exactly. The OP is clearly young, naive or simply doesn't get it.

        You also work a higher paying job to ensure financial security for family (kids), loans, holidays, toys and other commitments (as well as retirement).

    • CaptainJack on 26/11/2024 - 09:33

      They're not saying you get less total money in the pocket when you're paid more.

      Their point is that at 'high' incomes your marginal tax rate increases to near 50%, so (if its practical in one's job) you could - for example - work 20% less while decreasing take home pay by only 10%.

      Personally I've kind of done this - used to lecture at a university in my spare time, but giving up my evenings to teach while half that income gets taken wasn't worthwhile. Sucks for the students as they had trouble finding someone else that could teach that course - but that's the price you pay if society wants high taxation.

      That said, it makes sense to earn as much as possible when you're young, to let compounding do its thing.

  • Duckie2hh on 26/11/2024 - 09:40
    +1

    I guess the roads that OP uses and the hospitals that he visits must be gifts from god.

  • brendanm on 26/11/2024 - 09:47
    +2

    High paid jobs are a SCAM!!! I bet they screw you over on long service leave, which is also a SCAM!!!

    • May4th on 26/11/2024 - 10:01

      where do I sign up?

    • Crow K on 26/11/2024 - 10:12
      +4

      "We think you would be an excellent fit for our firm, random12, here's an offer of $500,000 a year"

      random12, playing 4D chess: Gentlemen, why don't we lower that amount to $190k? I plan on saving a lot on taxes this year (wink)

  • RockyRaccoon on 26/11/2024 - 10:27

    The issue isnt the salaries etc, its the people who read only the headlines.

    As others have pointed out. Its a Salary package that people go on.

    Its also why some already get reduced hours. Hey we only got 6% increase in salary, but at same time got reduction in work hours, extra loadings, more super, leave off etc.

    Its why politicians can say we will give you $10k as a first home buyer so you can compete (with more to buy a home, rather than build more homes or reduce population so prices increase (supply and demand etc).

    Or someone saying, they havent changed their current position, but no one knows what they are "currently" thinking - which could be different from what they they thought or said a few months ago.

    Or its global inflation or local inflation (varies according to politician being in power or not) when its both.

    Or when someone seen taking a cat is assumed to be eating them.

    As they say the devil's in the details

  • netjock on 26/11/2024 - 10:30

    You know when people want to argue for more pay because they are worth it.

    OP pretty much has it nailed.

    There is also the fact pay is like qualification inflation. Bachelors degree, then masters, then professional (grad diploma). Then you realise you also need another investment property to negatively gear some more. It is like the hamster wheel of pain. If you talk to these people they tell you they are very happy on the outside but they all have health conditions.

    I live in an area full of tradies and they usually live 3 generations at home. Probably as many Mercedes, Masaratis, BMWs and Teslas per capita as rich suburbs. Everyone in the family gets paid including grandma and grand dad to lower effective tax rates.

  • freefall101 on 26/11/2024 - 11:24

    Once you earn 190k, you are far better off working less hours for the the same pay, rather than working the same hours for more pay

    I've read that 5 times now and came away with the feeling of how short life is and how much closer to my death I am now.

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