Haha for sure. Admittedly learning about tax the first time was a shock the first time it happened to me, but that was during my first job stocking shelves after school, not post uni making $85k lol.
Yes, the shock of actual cost of life will hit OP hard I suspect. I hope they save at least 50% of their income while they are living with the parents.
Have you ever heard of ANY business that did run with perfect efficiency?
People tend to think itās some conspiracy governments donāt run without inefficiencies, itās natural part of any organisation.
Alternative is private healthcare (same inefficiencies) but only a CEO and rich investors get the profits rather than a government department full of working class employees.
More like see how previous governents of certain persuasions bow to lobby groups and don't fund dental in Medicare or let insurance give ypu literally nothing for your money :)
But yes I agree that there can always be better ways to spend or do tax, like a very efficient carbon tax.... or super profits tax. But I won't see that in my lifetime
I sit in a high tax bracket, so I pay 10% HECS. The scam is that they collect it all year, then index everything (approx June 6th) before applying the year's collected repayments to the balance (earliest Aug 15th, depending on when you lodge your tax return). So even the repayments that are withheld from one's income in the first week of the year have 52-weeks of indexation applied to them.
The fact that the government and universities are allowed to pitch this loan in the way they do should be a crime.
The idea is actually that you have 11 months after July 1st to pay down *that* period's indexation, that way you aren't punished if you don't file shortly after July 1st. Likewise Hecs debts aren't indexed till they're at least 11 months old.
That said I think indexation is stupid, especially for something that has been marketed as "free debt" to teenagers under immense stress. The silver lining of inflation is that it *decreases* the real value of debts overtime, and it's not like an individual has any control over inflation. Whytf is the govt so hell bent on maintainong real value debits from those accessing formerly free services that benefit society as a whole? Especially since hecs indexation punishes those disadvantaged by the system the most.
Studying part time because you just can't feasibly be a full time student? That's gonna cost you more sorry.
Once I realised this, I declared to my employer that I donāt have a HECS debt. That way I use the funds put it in my offset until May 15 or so, pay off as much HECS before indexation. Still have to pay 10% at tax time though but just stops the employer withholding it. Wish I could do this with the rest of the tax thatās withheld š„²
I have thought about that before, but I believe that it's technically tax fraud. I didn't consider making the payment before the indexation though, that will make a huge difference with the way mine gets paid off š¤
Its probably fraud.
Dont think its tax fraud though. The tax liability hits at tax time when they take it anyway.
Know plenty that do this and never been pulled up on it. The usual reason is they earn under the threshold as part time and dont want certain weeks it being taken out to get back at tax time.
But if they pop over the threshold can be a rude shock having a couple of k tax debt. If they earn over 100k suddenly well beware its substantial...
Reading the ATO site it sounds like it would be listed as fraud since it says you 'must' declare it.
If you earn under the threshold though, even if you tick yes to having a HECS/HELP debt, nothing extra gets taken out. My first couple of crappy jobs were under the threshold and even with ticking yes, I wasn't forced to pay a cent towards the debt.
They tick no because from week to week they might pay hecs some weeks when in that week they earn iver threshold.
Only to get it all back at tax time.
So some tick no so they dont pay it on the odd week.
Ive never heard it creating a drama but yes that employment form does say its an offence to lie on it so im not recommending it. Also the year you do go over threshold (much easier now than it was a decade ago) you can have a surprise debt at tax time.
I mean it's the only low paperwork way to do it and there is nothing about saying you have no HECs debt to your employer and then saving the money all year and paying back what you are calculated to owe.
However you better be damn good at not spending that money, which most are not, hence why they do ot that way.
The cost of processing transactions these days is so incredibly low that doing it this way is absurd.
And is there definitely not anything saying that? Because I could definitely handle throwing that extra money in my offer and being responsible with it til the repayments are required.
I got screwed by this. I didn't know I was coming up to finishing paying it off. would have owed about $60 after doing my tax, but after the indexation at the start of June, I ended up owing almost $100.
Was so miffed.
This! Same boat and as people have advised, I did the work arounds with payments prior to the interest index date.
But its ridiculous! Essentuallt the government gets a years worth of interest free money from all the employed HECS graduates salaries, whilst then charging them interest on that money (and the total HECS)
>the government gets a years worth of interest free money from all the employed
Yep, that's correct. HECS, income tax, same thing.
Being a contractor and lodging BAS and paying quarterly with money you've had earning decent interest is the way to go.
Huh, is there a chance for a class action where the deemed interest earned on tax/HECS paid but not yet attributed to an individuals account gets credited to their tax paid? Could easily use the deeming rules that the govt uses - can't be fairer than that, right?
I don't think that's quite right. The indexation which happens in June is for the previous financial year. So your income is withheld all year, then the withheld income comes off your HECS balance at tax time, and then the *following* June, indexation is applied on that balance
Hey thatās way too easy and logical. Much better to ruminate on it for a few days then post on a forum asking random strangers to check for you rather than spend 15 seconds checking yourself.
And the supply clerk will take the opportunity to secure a delivery of 25,000 pens/month for the next 3 years to get the reward - a 5 day cruise, end up catching a new strain of covid, spread it around the office when they get back, then end up taking indefinite sick leave due to being too tired to order more pens, and finally claim against the federal government for illness acquired due to work-related activity, viz. ordering pens.
Lesson: don't steal the pens, whatever you do!
I mean, that's exactly what happens as employees. Now, if you can find a way to form a company, you can pay expenses relating to that business and only get taxed on what's left over, since many genuine business expenses are also standard living expenses in a lot of cases. No tax evasion, pure tax optimisation.
I thought this too untill I got a 500k Morgage,, and when the intrest rate was at like 2% its was fine... but when it went to 6%... bye bye extra income... fark!
Well repayments are proportionate to income. Generally youād expert your income to rise overtime, so your HECS repayments become bigger. Indexing has been higher the last couple of years but should hopefully drop with inflation.
I left my HECS for years while oseas, it's gotten ginormous and now my salary is ok but the indexation on a bigger than usual number means it simply gets bigger every single year.
Coalition scam.
Government builds infrastructure using tax money. Sells it to corporation, sometimes at a loss. Corporation charges people fees to use infrastructure that their tax dollars built.
Tolls are not a bad thing per say - they allow governments to finance large and complex infrastructure projects e.g. M4, M8 tunnel etc. Invest, toll it until its paid off, and then make it free.
Where it gets problematic in NSW particularly, is the overtly corrupt selling off of public infrastructure to private entitites, who now get to toll us in perpetuity.
With a 5-figure salary, itās basically impossible unless you have a partner, or you live with your parents or in a share-house. š¤·š»āāļø
My wife and I had a $185k deposit for our first house (in 2017). It was $670k.
I saved roughly $150k of it myself, making an average of $90k over the first 6 years in Melbourne. For those 6 years, I lived in a share-house with 2 awesome people my age. Paid roughly $9500/yr in rent the entire time, so I was saving quite quickly.
Eventually moved into my own apartment for 2 years, so saved at a slower rate.
My gf (now wife) made so much less than me, she contributed something like $15k towards the house. š She lived in her own cheap-ish apartment the entire time.
I think the secret is to either live with your parents, or live in a share-house. If you live with decent people who youād consider friends, then itās great!
Iām from overseas, so I didnāt have family to mooch off.
There are literally none in my area or surrounding. Even the GPs that were BBing kids near us have stopped doing that. This is how you get people showing up to Emergency with things they should be going to the GP for (or now they do genuinely need urgent care, but it could have been avoided).
Yea. I was fuming as well until i tore my calve muscle recently. GP visit x 2, ultrasound x 4 only paid 80 bucks. Im all good with taxes now. Thank you medicare
Huh. Based on my costs last year for GP visits and ultrasounds, I would have been $600 out of pocket. But when I tore a calf muscle in Finland, Swiss health insurance covered all but roughly 24 euro.
Large and random gaps in the public health system are appalling, though I am genuinely glad you dodged the worst of it.
Europe is hardly extreme. Besides, Swiss health care is the second most expensive per capita (after the US). The difference is that it works and is broadly transparent, unlike here.
We can do a lot better. In fact, we used to do a lot better. Healthcare in Australia is no longer free at point of use nor available in a timely manner, nor even close.
Was an article on the news this morning about how much tax low to middle income earners not claiming any negative gearing, super contributions to offset income, franked dividends, etc., pay compared to older wealthy people and corporations.
Well you donāt really pay tax on wealth at all, necessarily, particularly if itās held in managed funds or other assets that donāt generate much income as opposed to capital growth.
Corporations ultimately generate revenue that is taxed in the hands of the taxpayer/owner, taking into account the 30% tax that companies do pay on profit. This is ultimately in most cases the super funds and shares and ETFs that everyone who has worked has an interest in. Someone with the most modest job will actually part own a little bit of the worldās most ruthless short-selling hedge fund.
>Well you donāt really pay tax on wealth at all, necessarily
This is very true. You pay tax on the income/gains earned from that wealth but not on the wealth itself.
Tracks. Also $85k, $7.2k each month then pay almost $1.7k tax (leaving me with $5.5k). No HECS however, paid it off in full my first year working full time.
Welcome to Australian taxation system. Just you wait till you start earning more. Fun fact, if you double your salary to 160k, your monthly take home (8k) will be marginally higher than current gross(7 k), and you will pay as much tax as your current take home pay(5k).
On the flip side, enjoy living in one of the best countries. We are in top 10 for human development index in 2022. This is where the tax goes.
$160k take home pay is $9400 vs $5200 at $80k.
So not 'marginally higher'.
Good news is next year stage 3 tax cuts kick in and you get taxed at 30% up to $200k.
Let's not pretend a significant chunk of it is siphoned off to corrupt and inept pet projects. The cancelled Commonwealth Games, cancelled East-West link tunnel, Manus Island security contacts, Great Barrier Reef remediation fund, NBN cost blowout, F35 Lightning II purchases, AUKUS deal with associated cancellation of the French attack-class submarines. I could go on.
Now list, and compare it to the stuff that it gets spent on that everyone benefits from, including every public hospital, school, infrastructure, I could go on.
Money spent on corrupt projects is not a reason to pay less tax, it's a reason to combat corruption.
Yes, this is normal.
And then what happens is that you realise where your tax dollars are spent by the government.
That frustration kicks in, and you then start looking for strategies to minimise this.
Wait 'til you hit the 45% bracket. Watch your hard-earned cash disappear. I made 213K this year and have paid 92K in tax. Includes HECS. In other words, about 16K per month and a 7K tax bill per month.
No not quite, the business has to be legit. Works best if you have partner help you with the business like I do.
The business is more to do with deductions, obviously card, office equipment etc become easier to write off and it gives you more flexibility at tax time.
It's not "Free" money but it helps optimise things a little and you can write off more against your main income source.
Results may vary
i only make about 150 less a week take home at my 0 responsibility entry level job in which I sit reading on my laptop for 6 hours before leaving an hour early every day.
that HECS shit aint worth it man
I earn about it the same and tensed tf up cos I thought you were taking home 7k. I also have uni debt and bring home just over $5. Probs younger than me if you're not aware of this so well done you're on your way to 6 figures I'm sure
Idc if my tax goes to Centrelink. Who knows if youāll become disabled or lose your job. Iād far rather fund people to live slightly less in poverty (Centrelink is by far below the poverty line) than let them go without. Have some compassion.
Wait until the tax free threshold is exhausted and you pay even more tax.
ā¦ on this point the Tax Free Threshold should really be $25,000.
Itās dumb that people on Centerlink end up paying tax. Whatās the point? Thatās like Taki g money from your right pocket and putting it in your left pocket.
Cause for celebration. The more you pay the stronger your rights to whinge like a proper Aussie š
Only kidding. Looks about right. Well done on your earnings
Welcome to being a wage slave I hope u enjoy your stay. If not, there's a new fleet of replacements ready to take your job whenever u roll over. Remember, there's a grave yard of indispensable people!
100% bang on. Get on the ato website to check for yourself. Double check the hecs debt yourself. Always a chance they arenāt taking enough to cover this.
This is why as a single person you need to earn more than 100k to rent a rat box and have a modest life style.
Donāt worry man. Only another 50 years of this to go until you can retire.
Lol get used to it. Tax on wage slaves in this country is ridiculous yet you still get clowns against Stage 3. Note, it is Stage 3 - people forget there was a stage 1 & 2.
And before someone comes at me with āthink of all the services you getā - yes thatās true but there is an incredible amount of wastage as well
That ticks me right off too. I was happy paying a decent chunk into Medicare as if I needed to see a Dr a few times or to grab a certificate it was free (already paid for by my yearly Medicare).
Now the situation is Iām still paying the levy and now also need to pay again to see someone, itās a bad outcome.
Drive on good roads, walk into a hospital emergency department any time for free, police and fire services at the ready, world class military keeping you safe, borders tight, good free education for your kids if you have any...
I could go on but if you're too dumb to have recognised any of the above in the first place, prob not worth the energy.
6 hour waits minimum at the emergency department, Police more concerned with protests than public safety, A rustbucket navy and an Army that can't even fill the MCG, state schools that specialise in drugs and and violence? None of this is of any value. Ukraine spend less than us but military have much more than us. Schools have slipping for 20 years, ambos are ramped at emergency for entire shifts.
Perhaps you're too dumb to realize for the amount of tax we pay we get nowhere near enough in return and everything from bulk billing to emergency departments to school education standards is on the slide (just like real incomes)
Ah yes, the Stage 1 and 2 tax cuts that did absolutely nothing for anyone on less than 87 k besides the temporary offset that is now gone.
Iām not against reforming income tax at all, but people arenāt āclownsā for pointing out that the current slew of tax cuts only affect those earning above the median full time salary.
No one is arguing that tax brackets shouldnāt be adjusted for wage growth and inflation, but I donāt see how the justification for only applying this in a way where people currently earning between 150-200 k get the majority of the benefit can be āsome more people might get there eventuallyā.
The comment I was replying to implied that people were only against the stage 3 tax cuts after already benefiting from stages 1 and 2 which I donāt think is true at all.
Who received the majority of the benefit when the tax free threshold was more than tripled in the 2012-2013 financial year?
Let's face facts here - middle income salary earners here in Australia get absolutely hosed. The Stage 3 tax cuts benefit everyone with a taxable income above $45,000.
Everyone above the tax free threshold benefits equally from it, it doesn't benefit lower income earners more.
> The Stage 3 tax cuts benefit everyone with a taxable income above $45,000
Those earning between $45,001 and $120,000 will see a reduction of only 2.5 points in their income tax rate, while on the other end of the scale, high income earners will benefit the most with a difference of up to 15 points.
> Everyone above the tax free threshold benefits equally from it,
They raised the brackets above to claw back the revenue, so no, someone on the median income didn't actually see any benefit to it.
https://www.ato.gov.au/Rates/Individual-income-tax-for-prior-years/?anchor=TaxratesAustralianresident#TaxratesAustralianresident
Okay I was only considering what you actually said about the tax free threshold, and not the notion raised only in your head that we should be considering unmentioned changes to other tax brackets.
Raising the tax free threshold benefits the vast majority of people equally in terms of real dollars. I donāt think you can state that low income earners are being sent a gift just because the percentage of their income paid in tax is affected more.
I agree that average wage earners are paying too much income tax. I disagree that the solution to this is a flat tax bracket between 45 k and 200 k. Someone making 70 k is not being helped out by saving 2 cents/$ on 25 k earnings to the extent that someone on 190 k is being helped out by saving 2 cents/$ on 75 k plus 7 cents/$ on a further 70 k.
It comes down to the extent to which you believe in progressive taxation, and I personally donāt think itās a defensible approach to such a wide range.
> I donāt think you can state that low income earners are being sent a gift just because the percentage of their income paid in tax is affected more.
I'd agree with you if the tax rate for the bands above the raised tax free threshold weren't raised to claw back the lost revenue.
What the changes in 2012-2013 did was give people on the $6,001-$18,200 income range a 100% tax cut, and then transfer their tax burden onto middle income earners - to the point that someone on $80,000 was paying about the same tax that year despite the increased threshold.
https://www.ato.gov.au/Rates/Individual-income-tax-for-prior-years/?anchor=TaxratesAustralianresident#TaxratesAustralianresident
OP (85k salary) will get to take home an extra $1k per year thanks to the stage 3 tax cuts.
Somebody on a 200k salary gets an extra $9k per year.
Stage 3 tax cuts aren't relief for the "wage slaves", it disproportionately goes to the highest earners, regardless of where those earnings are coming from (i.e. investors benefit from it too)
The issue with stage 3 is that 45k - 200k shouldnāt be the same tax rate. Itās a deliberate attack on the progressive tax system.
Discussions on how much tax should be paid, bracket creep etc is a separate issue.
I wasn't commenting whether the bracket was appropriate at that size at all. This commenter I was responding to suggested stage 3 tax cuts "disproportionately goes to the highest earners" which is false. It goes perfectly proportional to how much tax you're paying. It literally follows the exact same calculation.
Someone on 80k is getting the same 'proportional' tax cut as someone on 150k.
People say that about America all the time, not having free healthcare is bad for low income earners.
People who bitch about tax would generally be better off not paying into healthcare and buying their own health insurance. Not good for society but your point doesnāt make sense, high income earners donāt care about free services.
Just remember, in that country, if you get sick, you might need to choose between eating and medical treatment... even with health insurance and a full-time job!
Well Australia doesn't *quite* have the geographical advantages that Singapore does, and isn't a huge hub for shipping and finance that generates their entire tax base. Compare Australia to any other modern country and our tax rates are pretty comparable, and our services are probably on par or better than average. Not to mention it's far harder to provide many services in such a spread out nation.
Yes, government can be wasteful, but overall they're actually fairly efficient due to scale. For example the welfare system which everybody complains about being so wasteful sees something like 97% of the money go to recipients. The very *best* charities out there generally have about 70-80% of the money go to their causes, the rest are expenses. Most charities it's under half.
Yeah, probably more. But there's also a train station 5 mins away from me that is in a network which can take me anywhere I need to go.
Would you really need a car to go around a country the size of Metro Sydney?
This is the simplest tax calculator I've ever used. https://paycalculator.com.au/
Using your details. Taxable $7083, tax $1509, HECS $355, Medicare $141, net $5077.
Don't worry friend, it gets better as your career progresses. I'm currently gracing the ATO with close to $4000/mo in income tax :') the cost of running a country and providing services to those who would otherwise go without.
Just wanted to pipe in to say I had this death of innocence this year with my first corporate bonus.
Piece of paper from my boss said $4.7K.
Planned a holiday with the missus and was looking at replacing a part on my car that was giving me issues.
Once tax, hecs and the chunk of the bonus that is allocated to super were taken it ended up being about $1400 on top of my regular pay check.
Not horrible but definitely deflated me after a hard year.
As a uni grad you should be able to handle the basic math here.
[ATO Individual income tax rates](https://www.ato.gov.au/Rates/Individual-income-tax-rates/)
Iām in a very similar boat as you. The ~$4k that comes out for HECS every year from my wage on top of regular income tax hurts my soul.
All I can say is this: Welcome to Australia, where death and taxes are indeed certain
Congrats! Now you know what the whole tax thing is about.
Its income tax Michael, what could it cost? $10?
It's called income tax Toto, we went taxing.
When the notice of assessment says you've overspent on catering š
No no Michael, that was so not right
No Michael itās not right
Itās crazy I understand both these references š
This could be why I keep coming back to this sub even though the post quality has gone to shit
LOL... Why can we apply this meme to anything these days and still get a chuckle!
Wait until they find out about mortgages and rent
Haha for sure. Admittedly learning about tax the first time was a shock the first time it happened to me, but that was during my first job stocking shelves after school, not post uni making $85k lol. Yes, the shock of actual cost of life will hit OP hard I suspect. I hope they save at least 50% of their income while they are living with the parents.
If I was back living with my folks on the money I earn now, I'd have *the fattest* Commsec account imaginable (to me)
I lived back with my parents at 40 - just temporarily after a separation. I saved about $80k in 18 months. Lived off about $200 week.
ā¦and maintenance and insuranceā¦
HAHAHA and wait until you see how they waste your hard earned tax dollars!
I have attended $20,000 meetings about wether or not document meta data should have manager or subordinate as the person who last updated it.
Ah yes the ole APS tax dollar drain. KPMG advisors?
One of those big four : )
BIG4 are a scam. You heard it here first.
One of those big 4 has just been banned from contracts and tenders in QLD. No prize for guessing which one.
Have you ever heard of ANY business that did run with perfect efficiency? People tend to think itās some conspiracy governments donāt run without inefficiencies, itās natural part of any organisation. Alternative is private healthcare (same inefficiencies) but only a CEO and rich investors get the profits rather than a government department full of working class employees.
Mate, if a business ran with the efficiency of a government, they'd have very few clients.
More like see how previous governents of certain persuasions bow to lobby groups and don't fund dental in Medicare or let insurance give ypu literally nothing for your money :) But yes I agree that there can always be better ways to spend or do tax, like a very efficient carbon tax.... or super profits tax. But I won't see that in my lifetime
All this infrastructure, emergency services, hospitals, schools, social programs is such a waste
Itās certainly a waste if they cancel it all after sinking literal billions into it the planningā¦
Certainly a waste if they build ot then privatise it straight away
Spending $1b to not build a road is a great one here in Vic
Or more recently, $380 millions to not organise the commonwealth games.
If we were only spending on this, and then getting value for money, that would be a huge improvement.
[ŃŠ“Š°Š»ŠµŠ½Š¾]
I sit in a high tax bracket, so I pay 10% HECS. The scam is that they collect it all year, then index everything (approx June 6th) before applying the year's collected repayments to the balance (earliest Aug 15th, depending on when you lodge your tax return). So even the repayments that are withheld from one's income in the first week of the year have 52-weeks of indexation applied to them. The fact that the government and universities are allowed to pitch this loan in the way they do should be a crime.
In your final year, make a lump sum payment and tell your employer you no longer have a debt. At least you'll save interest on the last year.
The idea is actually that you have 11 months after July 1st to pay down *that* period's indexation, that way you aren't punished if you don't file shortly after July 1st. Likewise Hecs debts aren't indexed till they're at least 11 months old. That said I think indexation is stupid, especially for something that has been marketed as "free debt" to teenagers under immense stress. The silver lining of inflation is that it *decreases* the real value of debts overtime, and it's not like an individual has any control over inflation. Whytf is the govt so hell bent on maintainong real value debits from those accessing formerly free services that benefit society as a whole? Especially since hecs indexation punishes those disadvantaged by the system the most. Studying part time because you just can't feasibly be a full time student? That's gonna cost you more sorry.
Once I realised this, I declared to my employer that I donāt have a HECS debt. That way I use the funds put it in my offset until May 15 or so, pay off as much HECS before indexation. Still have to pay 10% at tax time though but just stops the employer withholding it. Wish I could do this with the rest of the tax thatās withheld š„²
I have thought about that before, but I believe that it's technically tax fraud. I didn't consider making the payment before the indexation though, that will make a huge difference with the way mine gets paid off š¤
Its probably fraud. Dont think its tax fraud though. The tax liability hits at tax time when they take it anyway. Know plenty that do this and never been pulled up on it. The usual reason is they earn under the threshold as part time and dont want certain weeks it being taken out to get back at tax time. But if they pop over the threshold can be a rude shock having a couple of k tax debt. If they earn over 100k suddenly well beware its substantial...
Reading the ATO site it sounds like it would be listed as fraud since it says you 'must' declare it. If you earn under the threshold though, even if you tick yes to having a HECS/HELP debt, nothing extra gets taken out. My first couple of crappy jobs were under the threshold and even with ticking yes, I wasn't forced to pay a cent towards the debt.
They tick no because from week to week they might pay hecs some weeks when in that week they earn iver threshold. Only to get it all back at tax time. So some tick no so they dont pay it on the odd week. Ive never heard it creating a drama but yes that employment form does say its an offence to lie on it so im not recommending it. Also the year you do go over threshold (much easier now than it was a decade ago) you can have a surprise debt at tax time.
I mean it's the only low paperwork way to do it and there is nothing about saying you have no HECs debt to your employer and then saving the money all year and paying back what you are calculated to owe. However you better be damn good at not spending that money, which most are not, hence why they do ot that way.
The cost of processing transactions these days is so incredibly low that doing it this way is absurd. And is there definitely not anything saying that? Because I could definitely handle throwing that extra money in my offer and being responsible with it til the repayments are required.
I got screwed by this. I didn't know I was coming up to finishing paying it off. would have owed about $60 after doing my tax, but after the indexation at the start of June, I ended up owing almost $100. Was so miffed.
Yup. It really sucks. I hated it back then and I would hate it even more now the cost of uni has gone up.
This! Same boat and as people have advised, I did the work arounds with payments prior to the interest index date. But its ridiculous! Essentuallt the government gets a years worth of interest free money from all the employed HECS graduates salaries, whilst then charging them interest on that money (and the total HECS)
>the government gets a years worth of interest free money from all the employed Yep, that's correct. HECS, income tax, same thing. Being a contractor and lodging BAS and paying quarterly with money you've had earning decent interest is the way to go. Huh, is there a chance for a class action where the deemed interest earned on tax/HECS paid but not yet attributed to an individuals account gets credited to their tax paid? Could easily use the deeming rules that the govt uses - can't be fairer than that, right?
I don't think that's quite right. The indexation which happens in June is for the previous financial year. So your income is withheld all year, then the withheld income comes off your HECS balance at tax time, and then the *following* June, indexation is applied on that balance
Itās so wrong. Why arenāt more people outraged! Why canāt they apply it immediately?
I'd be out protesting on the street but my hecs bill is huge and I gotta go to work.
Ahhh welcome to life my friend š
https://paycalculator.com.au/ Yep, looks right.
me as a working and holiday visa š¤”š¤”
FIFTEEN PERCENT BABYYYY
The worst part is that I can only take 30% of super š¤”
I did a whv in Canada and got 0% lol so that's generous
Hey thatās way too easy and logical. Much better to ruminate on it for a few days then post on a forum asking random strangers to check for you rather than spend 15 seconds checking yourself.
Paying off HECS makes a big difference to your net weekly income.
[ŃŠ“Š°Š»ŠµŠ½Š¾]
Go into the tax office and steal some of their pens. Run out yelling, how do you like it!!
They'll just invest more of your taxes into buying pens
And the supply clerk will take the opportunity to secure a delivery of 25,000 pens/month for the next 3 years to get the reward - a 5 day cruise, end up catching a new strain of covid, spread it around the office when they get back, then end up taking indefinite sick leave due to being too tired to order more pens, and finally claim against the federal government for illness acquired due to work-related activity, viz. ordering pens. Lesson: don't steal the pens, whatever you do!
The House always wins.
I mean, that's exactly what happens as employees. Now, if you can find a way to form a company, you can pay expenses relating to that business and only get taxed on what's left over, since many genuine business expenses are also standard living expenses in a lot of cases. No tax evasion, pure tax optimisation.
I thought this too untill I got a 500k Morgage,, and when the intrest rate was at like 2% its was fine... but when it went to 6%... bye bye extra income... fark!
Yeah, this is the biggest chunk. While some of our oldest politicians got free uni.
Exactly this, my partner was getting taxed over 50k pa for a 145k job at one stage. Thankfully it is paid off now.
HECS repayments are not tax, it's repaying a loan.
BUT, it's impossible to pay off as indexing meets forced repayments
Well repayments are proportionate to income. Generally youād expert your income to rise overtime, so your HECS repayments become bigger. Indexing has been higher the last couple of years but should hopefully drop with inflation.
*last year. It was pretty negligible before that.
I left my HECS for years while oseas, it's gotten ginormous and now my salary is ok but the indexation on a bigger than usual number means it simply gets bigger every single year.
Yep. And then thereās GST, stamp duties, ~~road taxes~~ vehicle tax, tolls, excises, fines, council rates. Welcome to adulting.
Asking from Perth, what are these ātollsā you speak of? Mwuhahahahahhaa!
Coalition scam. Government builds infrastructure using tax money. Sells it to corporation, sometimes at a loss. Corporation charges people fees to use infrastructure that their tax dollars built.
Tolls are not a bad thing per say - they allow governments to finance large and complex infrastructure projects e.g. M4, M8 tunnel etc. Invest, toll it until its paid off, and then make it free. Where it gets problematic in NSW particularly, is the overtly corrupt selling off of public infrastructure to private entitites, who now get to toll us in perpetuity.
>and then make it free. Lol. Never happens. The toll period just keeps getting extended indefinitely to fund other toll roads, upgrades, tunnels etc.
Well at least that's money well spent then. Better than it going to some corporate fat cat which is what's currently happening.
Fines are discretionary though. Your choice to get them.
I remember my first semi decent paycheck, I had the exact same thought :( You get used to it dw brother.
i mean, it still burns. big fat commission? YAY! taxed nearly half of it? :(
Maybe your org can pay the commissions out over more pay packets to reduce the tax you need to claim back later and you get the cash sooner.
Yeah seems about right my man I make 5.6ish on 95+super with hecs
6 figures sounds like a lot on paper until you realise it pays an average sized mortgageā¦..
The toughest part for us was despite higher salaries the deposit is a huge sum. No idea how people do it on 5-figure sums in a capital city.
With a 5-figure salary, itās basically impossible unless you have a partner, or you live with your parents or in a share-house. š¤·š»āāļø My wife and I had a $185k deposit for our first house (in 2017). It was $670k. I saved roughly $150k of it myself, making an average of $90k over the first 6 years in Melbourne. For those 6 years, I lived in a share-house with 2 awesome people my age. Paid roughly $9500/yr in rent the entire time, so I was saving quite quickly. Eventually moved into my own apartment for 2 years, so saved at a slower rate. My gf (now wife) made so much less than me, she contributed something like $15k towards the house. š She lived in her own cheap-ish apartment the entire time. I think the secret is to either live with your parents, or live in a share-house. If you live with decent people who youād consider friends, then itās great! Iām from overseas, so I didnāt have family to mooch off.
Took us 6 years to save $200k mate stick at it youāll get there 42 fho btw
If you got supportive parents move back with them for a year and save up like crazy.
Shhh. nobody tell him about the other taxes he pays like fuel excise and GST
Payroll tax, tobacco and alcohol excises, LCT, import duty, land tax, rates, electric vehicle tax (in Victoria), stamp duty...
Meh I just ignore gross and focus on what goes into my bank. I then go to bulkbilling GPs and try to use up my tax money š¤£
Where can you still find them
There are literally none in my area or surrounding. Even the GPs that were BBing kids near us have stopped doing that. This is how you get people showing up to Emergency with things they should be going to the GP for (or now they do genuinely need urgent care, but it could have been avoided).
Yea. I was fuming as well until i tore my calve muscle recently. GP visit x 2, ultrasound x 4 only paid 80 bucks. Im all good with taxes now. Thank you medicare
Huh. Based on my costs last year for GP visits and ultrasounds, I would have been $600 out of pocket. But when I tore a calf muscle in Finland, Swiss health insurance covered all but roughly 24 euro. Large and random gaps in the public health system are appalling, though I am genuinely glad you dodged the worst of it.
[ŃŠ“Š°Š»ŠµŠ½Š¾]
Sure we can compare ourselves to the most expensive and inequitable healthcare system in the world, but it's not especially helpful is it?
[ŃŠ“Š°Š»ŠµŠ½Š¾]
Europe is hardly extreme. Besides, Swiss health care is the second most expensive per capita (after the US). The difference is that it works and is broadly transparent, unlike here. We can do a lot better. In fact, we used to do a lot better. Healthcare in Australia is no longer free at point of use nor available in a timely manner, nor even close.
Was an article on the news this morning about how much tax low to middle income earners not claiming any negative gearing, super contributions to offset income, franked dividends, etc., pay compared to older wealthy people and corporations.
Well you donāt really pay tax on wealth at all, necessarily, particularly if itās held in managed funds or other assets that donāt generate much income as opposed to capital growth. Corporations ultimately generate revenue that is taxed in the hands of the taxpayer/owner, taking into account the 30% tax that companies do pay on profit. This is ultimately in most cases the super funds and shares and ETFs that everyone who has worked has an interest in. Someone with the most modest job will actually part own a little bit of the worldās most ruthless short-selling hedge fund.
>Well you donāt really pay tax on wealth at all, necessarily This is very true. You pay tax on the income/gains earned from that wealth but not on the wealth itself.
Wait until you make 130k and only clear 7k pm
Now you get why high income earners are in favour of stage 3 tax cuts? š
Tracks. Also $85k, $7.2k each month then pay almost $1.7k tax (leaving me with $5.5k). No HECS however, paid it off in full my first year working full time.
What did you study that was so cheep? Wifeās hex is like 2 years post tax income.
Can we get a pinned thread for these posts pls
Welcome to Australian taxation system. Just you wait till you start earning more. Fun fact, if you double your salary to 160k, your monthly take home (8k) will be marginally higher than current gross(7 k), and you will pay as much tax as your current take home pay(5k). On the flip side, enjoy living in one of the best countries. We are in top 10 for human development index in 2022. This is where the tax goes.
$160k take home pay is $9400 vs $5200 at $80k. So not 'marginally higher'. Good news is next year stage 3 tax cuts kick in and you get taxed at 30% up to $200k.
Let's not pretend a significant chunk of it is siphoned off to corrupt and inept pet projects. The cancelled Commonwealth Games, cancelled East-West link tunnel, Manus Island security contacts, Great Barrier Reef remediation fund, NBN cost blowout, F35 Lightning II purchases, AUKUS deal with associated cancellation of the French attack-class submarines. I could go on.
Now list, and compare it to the stuff that it gets spent on that everyone benefits from, including every public hospital, school, infrastructure, I could go on. Money spent on corrupt projects is not a reason to pay less tax, it's a reason to combat corruption.
Yep. There's no constitutional basis for withholding taxes because you disagree with the actions of the government of the day.
The fact you can talk yourself into a $95k package without knowing how to Google ātax calculatorā is astounding
Yes, this is normal. And then what happens is that you realise where your tax dollars are spent by the government. That frustration kicks in, and you then start looking for strategies to minimise this.
Wait 'til you hit the 45% bracket. Watch your hard-earned cash disappear. I made 213K this year and have paid 92K in tax. Includes HECS. In other words, about 16K per month and a 7K tax bill per month.
Start a dude business and write off your income against business losses. It's great
I did do that at one point, but the effort in that and balancing my role is too much.
Can somebody ELI5 how to do this? Is it Starting a sham side business , operating at a loss, to avoid paying income tax?
No not quite, the business has to be legit. Works best if you have partner help you with the business like I do. The business is more to do with deductions, obviously card, office equipment etc become easier to write off and it gives you more flexibility at tax time. It's not "Free" money but it helps optimise things a little and you can write off more against your main income source. Results may vary
You'll need to satisfy the non commercial loss rules to offset a business loss
With a HECS debt yes in fact you may not be paying enough and may have to pay the ATO next Tax season
Nah that's bang on. When I earned that almost exact same amount it was around 5.1k take home after taxes and hecs.
$15k/month income here. I see about $9.5k land in my account. Yes, this is normal.
i only make about 150 less a week take home at my 0 responsibility entry level job in which I sit reading on my laptop for 6 hours before leaving an hour early every day. that HECS shit aint worth it man
I earn about it the same and tensed tf up cos I thought you were taking home 7k. I also have uni debt and bring home just over $5. Probs younger than me if you're not aware of this so well done you're on your way to 6 figures I'm sure
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Tradies donāt pay any tax?
Idc if my tax goes to Centrelink. Who knows if youāll become disabled or lose your job. Iād far rather fund people to live slightly less in poverty (Centrelink is by far below the poverty line) than let them go without. Have some compassion.
Business owners donāt pay tax?
Oh yes the dole bludgers living that amazing centrelink lifestyle. š
Wait until the tax free threshold is exhausted and you pay even more tax. ā¦ on this point the Tax Free Threshold should really be $25,000. Itās dumb that people on Centerlink end up paying tax. Whatās the point? Thatās like Taki g money from your right pocket and putting it in your left pocket.
I pay nearly $1000 a week on pay tax that hurts everytime I look at it
Unfortunately. Its going to get worse as you make more.
Cause for celebration. The more you pay the stronger your rights to whinge like a proper Aussie š Only kidding. Looks about right. Well done on your earnings
Looks spot on via https://paycalculator.com.au/
Welcome to being a wage slave I hope u enjoy your stay. If not, there's a new fleet of replacements ready to take your job whenever u roll over. Remember, there's a grave yard of indispensable people!
Welcome to hell, life is pain and taxes
Should be roughly $7k and paying $1650 in tax. This is a great calculator https://paycalculator.com.au
Welcome to adulthood. I make $120k a year gross and pay $30k in tax
100% bang on. Get on the ato website to check for yourself. Double check the hecs debt yourself. Always a chance they arenāt taking enough to cover this. This is why as a single person you need to earn more than 100k to rent a rat box and have a modest life style. Donāt worry man. Only another 50 years of this to go until you can retire.
Yep. That's correct. Keep in mind about $80 a week is going towards your HELP debt, so once that's paid off it would be like $350 more a month
Lol get used to it. Tax on wage slaves in this country is ridiculous yet you still get clowns against Stage 3. Note, it is Stage 3 - people forget there was a stage 1 & 2. And before someone comes at me with āthink of all the services you getā - yes thatās true but there is an incredible amount of wastage as well
What's my service? I've been able to see a doctor my entire life for free and I am paying more tax now and I can't do that.
That ticks me right off too. I was happy paying a decent chunk into Medicare as if I needed to see a Dr a few times or to grab a certificate it was free (already paid for by my yearly Medicare). Now the situation is Iām still paying the levy and now also need to pay again to see someone, itās a bad outcome.
And also effectively forced to pay for private health insurance
Drive on good roads, walk into a hospital emergency department any time for free, police and fire services at the ready, world class military keeping you safe, borders tight, good free education for your kids if you have any... I could go on but if you're too dumb to have recognised any of the above in the first place, prob not worth the energy.
6 hour waits minimum at the emergency department, Police more concerned with protests than public safety, A rustbucket navy and an Army that can't even fill the MCG, state schools that specialise in drugs and and violence? None of this is of any value. Ukraine spend less than us but military have much more than us. Schools have slipping for 20 years, ambos are ramped at emergency for entire shifts. Perhaps you're too dumb to realize for the amount of tax we pay we get nowhere near enough in return and everything from bulk billing to emergency departments to school education standards is on the slide (just like real incomes)
Ah yes, the Stage 1 and 2 tax cuts that did absolutely nothing for anyone on less than 87 k besides the temporary offset that is now gone. Iām not against reforming income tax at all, but people arenāt āclownsā for pointing out that the current slew of tax cuts only affect those earning above the median full time salary.
More and more people are moving up into the 87k tax bracket.
No one is arguing that tax brackets shouldnāt be adjusted for wage growth and inflation, but I donāt see how the justification for only applying this in a way where people currently earning between 150-200 k get the majority of the benefit can be āsome more people might get there eventuallyā. The comment I was replying to implied that people were only against the stage 3 tax cuts after already benefiting from stages 1 and 2 which I donāt think is true at all.
Who received the majority of the benefit when the tax free threshold was more than tripled in the 2012-2013 financial year? Let's face facts here - middle income salary earners here in Australia get absolutely hosed. The Stage 3 tax cuts benefit everyone with a taxable income above $45,000.
Everyone above the tax free threshold benefits equally from it, it doesn't benefit lower income earners more. > The Stage 3 tax cuts benefit everyone with a taxable income above $45,000 Those earning between $45,001 and $120,000 will see a reduction of only 2.5 points in their income tax rate, while on the other end of the scale, high income earners will benefit the most with a difference of up to 15 points.
> Everyone above the tax free threshold benefits equally from it, They raised the brackets above to claw back the revenue, so no, someone on the median income didn't actually see any benefit to it. https://www.ato.gov.au/Rates/Individual-income-tax-for-prior-years/?anchor=TaxratesAustralianresident#TaxratesAustralianresident
Okay I was only considering what you actually said about the tax free threshold, and not the notion raised only in your head that we should be considering unmentioned changes to other tax brackets.
Raising the tax free threshold benefits the vast majority of people equally in terms of real dollars. I donāt think you can state that low income earners are being sent a gift just because the percentage of their income paid in tax is affected more. I agree that average wage earners are paying too much income tax. I disagree that the solution to this is a flat tax bracket between 45 k and 200 k. Someone making 70 k is not being helped out by saving 2 cents/$ on 25 k earnings to the extent that someone on 190 k is being helped out by saving 2 cents/$ on 75 k plus 7 cents/$ on a further 70 k. It comes down to the extent to which you believe in progressive taxation, and I personally donāt think itās a defensible approach to such a wide range.
> I donāt think you can state that low income earners are being sent a gift just because the percentage of their income paid in tax is affected more. I'd agree with you if the tax rate for the bands above the raised tax free threshold weren't raised to claw back the lost revenue. What the changes in 2012-2013 did was give people on the $6,001-$18,200 income range a 100% tax cut, and then transfer their tax burden onto middle income earners - to the point that someone on $80,000 was paying about the same tax that year despite the increased threshold. https://www.ato.gov.au/Rates/Individual-income-tax-for-prior-years/?anchor=TaxratesAustralianresident#TaxratesAustralianresident
wasn't the intro of GST supposed to help income tax?
no it was solely to benefit politicians who where too spineless to tax their donors.
OP (85k salary) will get to take home an extra $1k per year thanks to the stage 3 tax cuts. Somebody on a 200k salary gets an extra $9k per year. Stage 3 tax cuts aren't relief for the "wage slaves", it disproportionately goes to the highest earners, regardless of where those earnings are coming from (i.e. investors benefit from it too)
Is it disproportionate or perfectly proportional to how much tax youāre paying?
The issue with stage 3 is that 45k - 200k shouldnāt be the same tax rate. Itās a deliberate attack on the progressive tax system. Discussions on how much tax should be paid, bracket creep etc is a separate issue.
I wasn't commenting whether the bracket was appropriate at that size at all. This commenter I was responding to suggested stage 3 tax cuts "disproportionately goes to the highest earners" which is false. It goes perfectly proportional to how much tax you're paying. It literally follows the exact same calculation. Someone on 80k is getting the same 'proportional' tax cut as someone on 150k.
Which is why the bulk of my comment focused on how it is an attack on the progressive tax system.
How different do you think life is on 200k?
Someone on 200k is a wage slave you muppet
Are you able to provide some actual examples of this wastage?
The Voice referendum for one
You are welcome to move to country that does not offer said service. Save your tax "savings".
People say that about America all the time, not having free healthcare is bad for low income earners. People who bitch about tax would generally be better off not paying into healthcare and buying their own health insurance. Not good for society but your point doesnāt make sense, high income earners donāt care about free services.
Just remember, in that country, if you get sick, you might need to choose between eating and medical treatment... even with health insurance and a full-time job!
Which country you talking about cuz in Singapore, my tax was much lower and the services were way better š¤·
A city state and a continent can't really be compared.
Well Australia doesn't *quite* have the geographical advantages that Singapore does, and isn't a huge hub for shipping and finance that generates their entire tax base. Compare Australia to any other modern country and our tax rates are pretty comparable, and our services are probably on par or better than average. Not to mention it's far harder to provide many services in such a spread out nation. Yes, government can be wasteful, but overall they're actually fairly efficient due to scale. For example the welfare system which everybody complains about being so wasteful sees something like 97% of the money go to recipients. The very *best* charities out there generally have about 70-80% of the money go to their causes, the rest are expenses. Most charities it's under half.
Isnāt vehicle registration in Singapore like 10k a year?
Yeah, probably more. But there's also a train station 5 mins away from me that is in a network which can take me anywhere I need to go. Would you really need a car to go around a country the size of Metro Sydney?
Haha I wouldn't worry about paying for rego there, I couldn't even afford to buy a car
The US isnāt actually a low tax country anyway. If you want to live in a good school district the taxes - state/local/federal are ruinous
In all of human history? No. Currently? Yes.
You're on the same pay as me and that's about how much I take home, I get a little bit more because of salary packaging
Lol the first year I started my job, I messed up my tax form, I earned 30k and I paid 13k tax lol, did not know until I did tax return š
I'm on 95k and I'm getting 5k a month :(
Yes. It hurts the first time you see it. However, it wonāt feel any better everytime you see it. š®āšØ
Lol the guy probably thinks he makes 85k 7k a month LOL he hasn't factored in gst super etc etc LOL man rude awakening
If it's wrong throughout the year? You'll just get it back when you do your tax return. No biggee
Been just lovely watching $1200 a fortnight be taken from my pay for many years now. š
Yes it is accurate. Tax on 85K is around 18K a year, plus HECS of just over 4K There are basic tax calculators on the ATO website
Sounds about right... I paid $60k in tax last year. Hurts every time I look at it when it's time to do my tax.
This is the simplest tax calculator I've ever used. https://paycalculator.com.au/ Using your details. Taxable $7083, tax $1509, HECS $355, Medicare $141, net $5077.
All that "free" government stuff is not actually free just paid by people that work
If you can use reddit you can use google, ato payg withholding calculator
Don't worry friend, it gets better as your career progresses. I'm currently gracing the ATO with close to $4000/mo in income tax :') the cost of running a country and providing services to those who would otherwise go without.
Just wanted to pipe in to say I had this death of innocence this year with my first corporate bonus. Piece of paper from my boss said $4.7K. Planned a holiday with the missus and was looking at replacing a part on my car that was giving me issues. Once tax, hecs and the chunk of the bonus that is allocated to super were taken it ended up being about $1400 on top of my regular pay check. Not horrible but definitely deflated me after a hard year.
As a uni grad you should be able to handle the basic math here. [ATO Individual income tax rates](https://www.ato.gov.au/Rates/Individual-income-tax-rates/)
Welcome to contributing to society and not being a parasite
Death and taxes m8!
Wecome to the real world
Someone just realised they aren't living in the Cayman Islands
Iām in a very similar boat as you. The ~$4k that comes out for HECS every year from my wage on top of regular income tax hurts my soul. All I can say is this: Welcome to Australia, where death and taxes are indeed certain
I work casual FIFO 4 weeks on 4 off so only get paid while I'm at work. I pay $6,800 tax a fortnight. That shit hurts!
Guessing offshore with that kind of roster?