How to Save Money & Significantly Reduce Your Tax Today

Online calculators can be very useful in helping you determine the best option for your personal finances. But did you know that there are two types of free online calculators you can use right now that’ll help you save money and significantly reduce your tax?

What we’re talking about here are salary sacrifice calculators and novated lease calculators. What can they do for you and how do you find a reliable one online? Let’s take a closer look:

Salary Sacrifice Calculators

Salary packaging is a wise technique to help you maximise your income. When you are paid, generally the tax is taken off before you receive your salary. With salary packaging, certain expenses can be paid before tax. This means you will end up paying less tax overall, leaving more spending money in your pocket.

Salary sacrifice calculators help you to compare what the effect will be on your take home pay. It compares your salary packaging benefits using two different methods – as an after-tax contribution and as a salary sacrifice contribution.

It is important to note that the calculator considers a limited number of issues and it does not consider all of your personal circumstances. A salary sacrifice calculator provides you with a general recommendation that you can use to make a better-informed decision about how to receive your salary. It is not intended as financial advice relating to a financial product. You can seek further salary packaging advice from the professionals at easisalary.

Novated Lease Calculators

A novated lease is a three-way agreement between a financier, employee, and employer. The cost of the car, running costs, insurance, maintenance, and fuel are all included in the single lease repayment. Your employer pays for the lease of the car and then the single lease repayment is deducted from your salary as a combination of pre-tax and post-tax contributions, which reduces your taxable income. It is the smartest way for you to get a new car or package your existing car if you are an employee earning a salary.

It’s important to remember calculations provided by an online novated lease calculator are an estimate only and do not constitute a quote or offer of finance. It’s recommended you seek your own independent legal, financial and tax advice when making any decisions in respect to a novated lease. Calculations also do not take into account a luxury car levy that may be payable in cases where the amount financed exceeds the luxury car limit as set by the Australian Taxation Office. Calculations will vary where the luxury car levy applies.

A good online calculator will:

  1. Include vehicles which are available in Australia
  2. Use manufacturer data to populate running costs; like fuel usage, service interval, tyre specs and replacement km's
  3. Include Recommended Retail Price (when you are a government agency or entitled to government pricing, the list price should be used)
  4. Integrate finance rates
  5. Take into consideration the tax status of the employer, i.e. are they rebatable
  6. Factor in the GST savings
  7. Accommodate pay cycles
  8. Allow employees to simulate other items being packaged, like additional superannuation
  9. Be specific to the employer type, i.e. a government department or agency cannot package the same items as a hospital who have the CAP available.
  10. Allow the person doing the comparison to submit an enquiry using their requirements, allowing a consultant to review their requirements before contacting them.
  11. Respect your privacy
  12. Allow for feedback for continuous improvement

At the end of the day, you can save thousands of dollars with salary packaging and novated leases. Seek advice from professionals for more information on the best fit for you.

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