FHSSS calculations, am I correct or wrong?

Donaldhump on 06/11/2017 - 22:54
Last edited 06/11/2017 - 22:55

This is for a friend.

Background, Salary is 70k or so, so a tax rate of 34.5% and I have included the tax of 34.5%-30 % on the way out.

If they sacrifice pre tax 15k, they get

15000 * .345 tax returned = 5175 tax back

15000 * .85 in their super = 12750

Thus a total of 5175 + (12750 * .955) = 5175 + 12176 = 17351

As opposed to doing nothing = 15000-5175 = 9825

Thus the benefit is ~ 7500

Is this correct , so if they did this twice they get ~15k in benefit. I think I have double counted somewhere

Thanks

Financial

Comments

  • PAOK11 on 06/11/2017 - 23:33

    Your friend is earning 55k if he salary sacrifices $15k a year for 2 years (maximum he can salary sacrifice in the FHSSS is $30000). On an income of $70,000 he pays 14,297. By salary sacrificing 15k he pays $9,422 + $2250 = $11,672. Also they calculate your interest at 4.78% opposed to 2% interest in normal saver accounts. As super has higher interest.

  • lolz112 on 06/11/2017 - 23:34

    From what I understrand you just pay less tax.
    So instead of paying
    15000x0.345=9825
    you pay 15000x0.85x0.955=12176.25

    • PAOK11 on 06/11/2017 - 23:43
      +1

      Whats the 0.955 for ?

      • lolz112 on 07/11/2017 - 13:23

        Difference between marginal rate and 30% as OP alluded to.

    • lolz112 on 07/11/2017 - 13:25

      Should be you get to spend, instead of you pay

  • ausdday on 07/11/2017 - 10:32

    According this http://www.budget.gov.au/estimator/

    Sacrifice 15K annually, you will have $25,355 for your first home deposit after 2 years. So you have been taxed $4,645 in total and earn whatever % of interest FHSSS paid.

    As oppose to paying ($30,000 x 0.345 = $10,350) tax. You will have $19,650 + interest earn from FD, after 2 years.

    The estimator expects "This is $5,802 more than if the saving had occurred in a standard deposit account."

    IMHO is, it's better just to buy the house now, and pay for the mortgage insurance :)
    1. The housing price will go up in major cities in Australia. House price waits for no one. You might lose more if you waited for another 2 years.
    2. with $25K as deposit, you are looking at a property with a price tag of $125K (20% deposit before mortgage insurance kicks in).
    3. If you do not buy a house after 2 years, your contribution will be locked in your super, and you will have no access to those funds until you retire, or decided to buy your first home much later.

    • Donaldhump on 07/11/2017 - 14:00

      was only going to wait till July 2nd
      sacrafice 30th June, sacrafice 1st July, Withdraw the next dat if allowed.

      ill be paying cash, just trying to funnel a quick 10k out

      • John Kimble on 07/11/2017 - 21:51
        +1

        I thought it was for a friend?

        • Donaldhump on 07/11/2017 - 21:53

          Tennent in common with a friend

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