Hi,
I am moving to Melbourne in the new year an need some help with working out how much money I will end up with as take home pay. I wil get a salary of $110,000. I get a bonus but dont want to include it as I want it to be a bonus not somethime that I need!!

Thanks for your help

Waca

Will you be a temporary resident and if so will you be receiving LAFHA ? If yes - any idea how much you will be alloocated ?

Also are you single or attached ? Will your wife/partner be working ? Do you have kids ? Will you be getting private health insurance ??

With this info calculating your take-home pay will be straight-forward.

Colin,
I will not be getting LAFHA as part of the deal. Im married with 3 kids, my wife will work part time at most. There is no heath insurance with the job.

Thanks for you help

Waca

Ok - well let's assume you are tax resident for the whole year (which you will be eventually) and that your wife IS NOT working.

Your monthly take home would be $6432.

However if you do not take out private medical cover you will be liable for an additonal 1% (Medicare Levy Surcharge) of your total family income - so in this case it would be $1100 if your wife is not working. (Incidentally if your family income was less than $104,500 then you would not be liable for this amount).

I also challenge you to find a family medical insurance for less than $1100 per year ! It is also my opinion that public health treatment is no better or worse than the NHS system. So if you paid for private cover in the UK then go ahead - get it here although it will cost you heaps as a temporary resident ! However you will have access to Reciprocal Health care here which will entitle you to immediately necessary treatment in public hospitals and with GP's.

Now of course you have to consider your bonus. This will increase your total annual income which will increase your medicare levy surcharge paybale at the end of the year. If you want to avoid paying the tax man at the end of the year and want to have additional tax withheld every month, you can ask your employer to do this - means you dont have any huge surprises come July every year ! The income tax due for the bonus should be withheld by your employer when they pay it to you.

DOes the medicare levy get taken from your salary every month or do you pay it at the end of the tax year? Of i am on a 457 does that mean because I get my heath care under the reciprocal health care scheme without having to pay out medicare?

What would be the difference if my wife was working?

Cheers waca

The basic medicare levy (1.5%)is paid by everyone who is considered a "resident for tax purposes" which a 457 holder is. This is irrespective of whether you have reciprocal health cover or not. The basic 1.5% is withheld by your employer every month along with your income tax.

As I mentioned before if your family (ie yours + your wifes) income exceeds $104,500 then you will have to pay the MEDICARE LEVY SURCHARGE (MLS) which is an additional 1% of your total family income. If you exceed the threshold the only way to avoid paying it is to have private medical insurance.

So if your wife earned $40,000 per year and you got a bonus of $10,000 per year then your total income would be $160k and you would pay $1600 (between you) as MLS.

Any income your wife might earn will have no effect on your take home pay, but it will have an effect on how much MLS you will have to pay at the end of the tax year when you submit your tax return. This can be avoided by opting to have more tax withheld throughout the year from every pay packet - especially as you will have your bonus as well. Or take out private medical insurance - but be warned - even with insurance not all costs are covered and you will still have out of pocket expenses or gaps between what the doctor charges and what the health fund will pay out.