Hi

I am currently residing in the UK and have been offered a job to work in Australia. My sponsor will be paying me LAFHA.

I am trying to calculate, approximately, what my net pay would be if I had a package of say $A120,000 per annum with $A78,000 being the base salary and $A35,000 being LAFHA. There is a superannuation component but i assume that is deducted from my salary ?

Many thanks for your help

Superannuation contributions are not deducted from your pay, not unless you request ADDITIONAL contributions to be made, then they can be made either as a salary sacrifice arrangements where the deduction happens PRE tax or as after tax contributions. I strongly suggest making a minimum of $1,000 in after tax contributions (depending on your income status of course as there are phase out limits) as the government will match your after tax contribution dollar for dollar up to $1,000 per year.

I'm a little confused about your question as the math you present doesn't add up (78+35=113 not 120). But working on the assumption that your total package is 113k it would work like this...

annual compensation 113000
LAFHA -35000
taxable compensation = 78000
tax withheld = 18150 (+/-)
net pay = 59580
LAFHA = 35000

total cash in pocket = 94850


you can use the tax calculator on the ATO website to make your own calculations

http://www.ato.gov.au/scripts/...c_standard_hire.aspx

Cheers,
Marilyn

Thank you Marilyn,

Is there much difference between states when it comes to tax deductions ? I will be in Victoria.

chris

Hi Chris,

No, the income tax code is universal in Australia. There are some differences in taxes for taxes such as stamp duty, payroll tax, and of course water and council rates, but the income tax system is controled by the federal government and will be the same in every state & territory.

Deductions are allowed for expenses incurred in earning income. The major deduction categories on the individual tax return are as follows:

D1 - Work related car expenses (your privately owned motor vehicle)(deduction allowed for work use of your car NOT for travel to & from home/work)
D2 - Work related travel expenses (bus, train, plane, taxi) (same as above NOT for commuting costs)
D3 - Work related uniform (purchase, laundry & maintenance)
D4 - Work related self-education
D5 - Other work related expenses (not covered in D1 - D4)
D6 - Depreciation allowance for work related asset purchases
D7 - Interest deductions (expenses you paid in order to earn assessable interest)
D8 - Dividend deductions (expenses you paid in order to earn assessable dividends)
D9 - Donations to charity
D10 - Cost of managing tax affairs


Probably more than you wanted to know :-)


Cheers,
Marilyn