Case Study | Relocation Expenses

Objectives:  

Tom, an employee mining electrician has just got a new job in Port Headland, WA and will need to relocate his family from QLD. He wants to save some tax to help fund the relocation costs.

Facts:

• Incurs $18,000 in airfares, accomodation, and furniture transport costs relocating the family.
• Tom’s current wages income is $200,000 pa.

Accountant’s Advice: 

• Tax Strategy 9: Relocation Expenses – Salary sacrifice the $18,000 relocation costs with his new employer. The employer will reduce Tom’s first year wages by $16,364 (which is the $18,000 relocation costs less the 1/11 GST refunded to the employer).

Results:

• Tom saves $7,691 tax ($16,364 @ 47%).
• Tom saves the $1,636 GST on the $18,000 relocaction expenses incurred.