TOT being removed in exchange for increased salary. Help.

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#1579277 23-Jun-2016 22:09

mudguard: An update
They've offered a $10k upfront payment(net) , $15k pa salary increase, and 36c per km for business use. So pretty reasonable in my opinion.

The official IRD rate is 72c per km, so there's a little bending of rules there I'd think.
Remember is a reimbursement so non taxable.

The salary increase is of course subject to tax, so given the lower per/km rate is it possible you'll be worse off than had you been given the official rate?

The upfront payment simply helps you get a vehicle and makes the deal looks more attractive. But at the end of the day you providing your own vehicle on these terms removes cost, time and responsibility from them and puts these back on you.

E3xtc

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#1579336 24-Jun-2016 07:42

Am surprised to see the massive difference between their per km rate and the standard ird rate. Having gone down this road before (ie having the car removed and given a representative increase in salary), I think they are getting off pretty lightly.

jmh

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#1579349 24-Jun-2016 08:20

36c seems a bit low for using your own vehicle. I have two different contracts, one assessed by an independent body, and both pay 77c. It's wear and tear etc.

Dynamic

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#1579355 24-Jun-2016 08:36

jmh:

36c seems a bit low for using your own vehicle. I have two different contracts, one assessed by an independent body, and both pay 77c. It's wear and tear etc.

The 77c IRD rate is an average that is unsuitable for (for example) old vehicles that have been well depreciated and something like a brand new Holden Commodore gas guzzler that depreciates by 30% the minute you drive it off the car yard.

Of the OP's mention of his changes, the $15k salary increase translates to an extra $10k in the hand after tax, which paid every year allows for a reasonable vehicle. Therefore the per km rate does not need to take depreciation into account - it's just paying for the gas and tyres and servicing.

I would aim for a slightly higher per KM rate, but it doesn't look like a horrible deal to me

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mudguard

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#1579377 24-Jun-2016 09:04

I get the impression that 72c is aimed at lower users. So using my figures

30,000k pa (took 10k out for personal that I won't be reimbursed for)

$10,800 pa net from the mileage

$9391 pa net from the allowance

$10,000 net which goes into our account next week.

My annual fuel cost will be about $6000 per year now, insurance was cheaper than I was expecting as was the new rego prices.

We are still limited to the vehicle we use, but I figure it leaves about a grand per month to lease, or finance a vehicle. We have access to rental cars for 3 months until we decide. But the work vehicle goes back very shortly. As I said, I'm quite happy with it, other than the initial panic on having to organise this at short notice. I figure I can get effectively own (at the end of 3 years) a car I like with a 100,000 k on clock and full service history.

dickytim

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#1579379 24-Jun-2016 09:05

oxnsox:
mudguard: An update
They've offered a $10k upfront payment(net) , $15k pa salary increase, and 36c per km for business use. So pretty reasonable in my opinion.

The official IRD rate is 72c per km, so there's a little bending of rules there I'd think.
Remember is a reimbursement so non taxable.

The salary increase is of course subject to tax, so given the lower per/km rate is it possible you'll be worse off than had you been given the official rate?

The upfront payment simply helps you get a vehicle and makes the deal looks more attractive. But at the end of the day you providing your own vehicle on these terms removes cost, time and responsibility from them and puts these back on you.

0.72 is the maximum rate that a company can offer.

36c + $10,000 p.a. seems like a legitimate offer.

Do they have criteria on the vehicle you are expected to run?

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Dynamic

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#1579381 24-Jun-2016 09:08

dickytim: 0.72 is the maximum rate that a company can offer.

No, that is definitely not correct. If interested in the subject, so some research into this.

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mudguard

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#1579388 24-Jun-2016 09:25

dickytim:

Do they have criteria on the vehicle you are expected to run?

Yes, less than 5 years old, under 200,000k, medium size car and up, compact SUV and bigger. 4 doors, 5 star ANCAP rating. There may be some flexibility, we need to request a vehicle for review if it's outside of that criteria. I personally want a smaller car, and it's the age old dilemma of getting a well specced small car, vs a base model bigger car.

jonb

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#1579409 24-Jun-2016 09:53

If going into car choosing thread, something like an efficient VW polo or the Skoda equivalent (currently with 5yrs free servicing Fieldays deal) for ¬$20k might be nice.

trig42

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#1579424 24-Jun-2016 10:12

Get a Mazda3 MPS - you'll have fun.

mudguard

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#1579437 24-Jun-2016 10:47

jonb:
If going into car choosing thread, something like an efficient VW polo or the Skoda equivalent (currently with 5yrs free servicing Fieldays deal) for ¬$20k might be nice.

Bahaha. I have been pricing up a Polo GTi!!
Fuel consumption is now an issue, so the less used the better for my pocket.

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Aredwood

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#1579900 24-Jun-2016 23:43

Consider buying a ute. As they have far less depreciation compared to a normal car. As you don't have lots of second hand ones coming into the country as jap used imports. Even if they have done 200,000+K they still sell for big money.

mattwnz

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#1579907 25-Jun-2016 00:09

Aredwood:

Consider buying a ute. As they have far less depreciation compared to a normal car. As you don't have lots of second hand ones coming into the country as jap used imports. Even if they have done 200,000+K they still sell for big money.

I would second that. I sold a 12 year old ute for half of what I paid for it. But the tech in them are prehistoric compared to a car. Most still have leaf springs in the rear.

mattwnz

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#1579908 25-Jun-2016 00:11

trig42:

Get a Mazda3 MPS - you'll have fun.

You mean an SP25? If so I would suggest a manual if you want a good drivers car. An auto takes too much of the driving out of it.

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#1579910 25-Jun-2016 00:35

mattwnz:

trig42:

Get a Mazda3 MPS - you'll have fun.

You mean an SP25? If so I would suggest a manual if you want a good drivers car. An auto takes too much of the driving out of it.

Pretty sure he does not mean SP25

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