Hi all, We are Kiwis, now living in Perth. My partner is just about to sign up for a 12 month contract. Australia seems to have a tax system in the dark ages and even as a contractor he needs to contribute 9% to superannuation.
His agent is keen to get him to do some salary sacrificing which is a tax lurk where if you are over 50 you can "salary sacrifice" up to $100k a year into super - only paying 15% tax. All capital and income is free of further tax if he leaves it until he's 60 - 5 years time.
The purpose of working here was basically to pay our living expenses and pay for further traveling. We have a property and share portfolio's in NZ which we believe sufficient to cover our retirement. Therefore initially I was anti putting anything in super - now the tax breaks make it appear unbelievably attractive.
The question is are we better to invest in Aussie super or pay off our flexiloan in NZ?
He is earning approx $100k pa but as will start work next week the current tax year (30 Jun) will be a lot less than that - we've been traveling until now so had no paid employment.
I am starting up an online business so don't expect to make much of a profit on anything this tax year.
We have flexiloan in NZ but do not HAVE to transfer cash to top it up.
Our flexiloan in NZ is currently 10.55%
Without any deductions, sacrifice etc
This tax year his tax rate on approx $50k income would be 19%
On a full tax year his tax rate on approx $100k income would be 29%
We have until June to decide whether to make the extra payments.
So are we better off paying the NZ loan off -which we could withdraw from again to travel, or tie the money up for 5 years.
I don't know how to predict exchange rates! - though with the rate as it is I am tempted to send money home to NZ.
I assume that NZ interest rates may begin to drop in the next year or 2.
We don't have a huge exposure to Australian investments and can see some benefit having money in Australia as we will probably continue to holiday over here into the future, so regardless of exchange rates we could always spend the A$ over here.
We do intend to return to NZ to live at some point in the next 10 years.
Sorry - this is a bit off topic for this forum but I figured we are a pretty mobile bunch and maybe some other Kiwi's had been in the same situation?
His agent is keen to get him to do some salary sacrificing which is a tax lurk where if you are over 50 you can "salary sacrifice" up to $100k a year into super - only paying 15% tax. All capital and income is free of further tax if he leaves it until he's 60 - 5 years time.
The purpose of working here was basically to pay our living expenses and pay for further traveling. We have a property and share portfolio's in NZ which we believe sufficient to cover our retirement. Therefore initially I was anti putting anything in super - now the tax breaks make it appear unbelievably attractive.
The question is are we better to invest in Aussie super or pay off our flexiloan in NZ?
He is earning approx $100k pa but as will start work next week the current tax year (30 Jun) will be a lot less than that - we've been traveling until now so had no paid employment.
I am starting up an online business so don't expect to make much of a profit on anything this tax year.
We have flexiloan in NZ but do not HAVE to transfer cash to top it up.
Our flexiloan in NZ is currently 10.55%
Without any deductions, sacrifice etc
This tax year his tax rate on approx $50k income would be 19%
On a full tax year his tax rate on approx $100k income would be 29%
We have until June to decide whether to make the extra payments.
So are we better off paying the NZ loan off -which we could withdraw from again to travel, or tie the money up for 5 years.
I don't know how to predict exchange rates! - though with the rate as it is I am tempted to send money home to NZ.
I assume that NZ interest rates may begin to drop in the next year or 2.
We don't have a huge exposure to Australian investments and can see some benefit having money in Australia as we will probably continue to holiday over here into the future, so regardless of exchange rates we could always spend the A$ over here.
We do intend to return to NZ to live at some point in the next 10 years.
Sorry - this is a bit off topic for this forum but I figured we are a pretty mobile bunch and maybe some other Kiwi's had been in the same situation?
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