Hi,

I have been offered two similar jobs, to be based in Sydney, but I don't know which is the best salary. Both are on a 457 visa with LAFHA, however Job #1 gives the actual LAFHA entitlements, whereas Job #2 LAFHA will be calculated when I start the job.

Job #1:
Basic salary: 100K
Superann: 9K
LAFHA House & Food Allowance: 41K
Total Package: 150K

Job #2:
Basic salary: 143K
Superann: 12.9K
Total Package: 155.9K

So I need your advise in determining which is the best salary package.

Thanks,
Ken.

G'day

Job #1) Earn $100Kpa, tax $27,850pa leaving $1,388/week + $788 LAFHA = $2,176/week

Job #2) Earn $143Kpa, tax $45,050pa leaving $1,884/week. Slightly improved by an extra $75/week super. ($3,900pa)

Of course these assume a full financial year from 1/7 to 30/6. The situation is slightly different if the income is for only part of a financial year. However, the choice seems clear to me, if you can get some of your income tax free (as a lahfa) then it's obviously the way to go.

heers
Bob Johnson

Hi Bob

Thanks for your input - its much appreciated!

Job #2 weekly salary could be higher if adjusted for LAFHA. For example, if you assumed $550 per week for rent, plus $220 for food, giving a total LAFHA value of $770 per week. And assuming LAFHA effectively means not paying tax on $770, which increases the weekly income after tax by 40% of $770, i.e. an increase of $308, giving a total of $2192 per week.

Are my assumptions and calculations correct?

Cheers,
Ken.

Yes, they seem so.

Obviously if you can offset part of your normal income and have it paid as a tax free benefit, it is in your interest to so do.

Above $75Kpa the tax rate is 40%, above $150K it is 45%.

Tax rates and income thresholds are subject to today's Federal Budget ...

Best regards.