I think this is the BEST tax calculator around! It's so easy to use AND is up to date with the latest percentages.
Have you ever wanted to know:
how much a base wage/salary is as a take-home pay weekly, fortnightly or monthly?
updated tax brackets for this year or previous years?
what the difference in taxes will be if you were to salary sacrifice?
how much superannuation your employer will pay?
The real difference between a pay rise or a job offer?
This tool is SO COOL it can do all the above! I have used it so many times over the last few years. Today my husband was trying to work out if a job offer was a good weekly wage, then I realised I can use this tool for that too! It's the bomb for all Aussies that love to simulate and quickly see what a difference some contributions to super can do for your tax.
I will do a few samples below to get the juices flowing and I would love to know how you go too. Did you find out something that you didn't realise before?
Go to www.paycalculator.com.au and enter your annual salary.
The superannuation rates are there and you can choose different options depending on your situation
You can do different tax years too
It then shows your weekly, fortnightly and monthly take-home pay over on the right hand side.
Here comes the fun part … ! Now let's add some extra super contributions. 🤩
The above screenshot shows $6033 take-home pay each month. Now if you were to salary sacrifice $1000 per month, the below screenshot shows us the take-home pay is $5375.
Even though you took $1000 out of your pay, it only REALLY reduces your take-home pay by $658 per month ($150 per week).
THAT’S $342 per month FREE money from the tax man! This equates to $4000 tax saving per year. Pretty good for not doing much. NB: Two things to note, you do pay 15% tax when you put your money into super and you can't access your super until you reach retirement age.
It takes a lot to get this type of tax advantage when you have an investment property negatively geared, and it takes a lot of capital/ loan to have an IP, compared to this process which is as simple as setting it up with your payroll system.
Okay, now I am going a bit cray cray and try a few more simulations to see how it affects the weekly take-home pay and the amount added to the super fund.
Check out the screenshot below. Pretty cool! I like to see the super section expand and the Tax part decline!
It also shows you when you go over your limit for the year for salary sacrificing. Handy!
The best thing at the moment is that we can go back to tax years 2018/2019 and if you haven't been maxing out your super contributions of $25,000pa you can do this now. The calculator allows you to add what is your 'carry forward' so that the calculation works the numbers out accurately ... GOLD.
You can even add student loans, Medicare, contributions to spouse and so much more.
The final one I wanted to show you, is how you can play around to change your tax bracket.
For example, the below screenshots show a salary of $65,000pa gives you a weekly take-home pay of $1001.
Now, if we add some salary sacrifice and push the taxable income to below the tax bracket of $45,000, let's see how much tax we can get back!
Adding in a salary sacrifice of $400 per week and the new weekly take-home pay would be $735. A difference of $266 even though $400 is going into super, a tax reduction of $134 per week which benefits you now, AND you have more going into super which benefits FUTURE you.
There are lots more things you can do with this and if you check out the website you'll see things like where our tax paying dollars go, student loan calculators and income tax brackets for several years.
Now, if you do find that investing into super could do some magic for Future U, don’t just simulate, use this information to make the changes for this new financial year. Of course, start with working out what you can afford, having an emergency fund etc.
Next week I will delve into getting ready to invest and my thoughts on this as well as my own checklist.
Look forward to investing with you.
As always, you DO you. X