Hi! Haven't been on here for a while but I have a real dilemma and was hoping you guys might be able to help.

After 5 days in Melbourne and four interviews I have been offered two posts. The first was a permenent position offering a $80k package plus super at 10%, medical insurance and bonus scheme. I was over the moon at the prospect! The next day I got the second offer of a contract position over six months (possibly longer) offering $500 per day.
My question is this: given that the contract position does not pay super, holiday, sickness or medical insurance is it really that much better? Could I fall into a higher Tax bracket with the contract work?

I have until Monday to decide and could do with some advice on how it all works. Thanks in advance...

Also out of interest, with either job I would be working in Melbourne CBD and would like to know where you would recommend for living. Visited Geelong yesterday and it was lovely but is it too far to commute every day? (Emma, Dans wife)

Dan

Are you here on a permanent visa ??

First of all your contract position does have to pay super but it may come out of your $500 per day (at 9% and not 10% - 9% is the legal minimum) - you might want to check that one out !

Your decision is mainly one of whether you would rather have a comfortable income, increased super, not having to worry about paying for medical insurance or the chance that in 6 months you might have to move on somewhere else, or take a higher salary paying lots more tax and still having to pay for medical insurance (if you want it) and take the chance of having to possibly find another job in 6 or 9 months time.

On $500 per day you would be earning $120k per year (assuming a 5 day working week and working 48 weeks of the year - even though you might only work there for 6 months you will still be taxed as if you are going to earn $120k for the whole year. So the $40k that you earn between 80k and 120k you will be taxed at 40% and will therefore loose $18k of it in tax - or $75 per day (and that is just the 40% tax) !

And then of course as you quite rightly mention there is no sick leave or holidays with a contract position. I was a contractor for 2 years when we first came here and while the money was good we had to be very careful to ensure that we had enough money put away to pay the rent and food etc when we wanted to have a holdiay.

Personally I would go for the permanent position.

Thanks Colin, brill advice - just what I was after...
I am here on perm visa.
I wasn't aware of the $80k tax bracket, and as you said that makes a large difference. Thanks once again,

Dan

Dan,

The commute to Southern Cross station (western end of Collins Street/Bourke Street) from Geelong takes about an hour. The commute from some of the SE suburbs of Melbourne will take just as long ...

Having travelled to MEL from Geelong a few times in the morning I'd recommend boarding trains from South Geelong or Marshall rather than Geelong or North Geelong - you run a real risk of standing all the way if you get on the train at one of the latter two stations.

VLine train timetables are here:
http://www.vline.com.au/index_timetables.aspx?sid=22

Best regards.