Credit Card Applications and FBT

Discussion in 'General Credit Card Discussion' started by cabbage74, Apr 8, 2005.

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  1. cabbage74

    cabbage74 Intern

    Mar 28, 2005
    wishing to apply for a Citibank card, however my "taxable" income does not meet the required level for the card. Now the annoying part is that I salary sacrifice (directly into my existing credit card account) and I don't think the poor people in Manilla had a clue what I was on about. They kept telling me that the FBT was due to a once off, when it happens every fortnight a day after I get my normal pay.

    I'm not wanting to go off and tell citibank that I have an income of $50,000, and then have the ATO send out the goons for undeclared income.

    Does anyone know how I can speak to an informed person who would have an understanding of such matters?


  2. New Chump

    New Chump Member

    Nov 23, 2004
    Sorry Malcolm, I can't offer any useful advice on explaning the difference between taxable income/taxable income grossed-up for FBT to your average CB telephone operator in Manilla, but I am interested to know how you can salary sacrifice directly into your credit card account.

    I'm hoping you have magically found me a way to pay Mrs Chump's hefty AMEX bills with some pre-tax dollars. (Suspect you can do this working for a charitable/benevolent institution only, but will be very happy if this is not correct!)

  3. MetroAir

    MetroAir Guest

    VERY interested to know how you sal/sac into a redraw facility!?!

    I sal/sac (am part of 'benevolent institution') and don't know how to do it, had to split my mortage into redraw/principle to get benefit into principle part.

    But back to the question, your financial advisor should be able to sort this easily. You would/should need one for sal/sac (its sooo complicated).

    Your Group Cert may help (if you are PAYE)

  4. cabbage74

    cabbage74 Intern

    Mar 28, 2005
    Ok, not quite directly into credit card account but close.
    Will explain what I do.
    I work for a Public Benevolent Institution -> Wesley Mission Brisbane.
    The company I use is (formerly PKF).

    Working for a PBI gives a FBT limit of $30,000. $541.92/fortnight.
    The $541.92 per fortnight is sacrificed, and deposited into RemServ account instead of my savings account.

    From there I believe that I can use that $$ for anything I want as long as it is a bill. The credit card statement is considered a bill. So if you send them 12 months of statements they will automatically transfer to the credit card each fortnight as they receive the $$ from your employer.

    Some extra notes.
    I didn't use a Financial Advisor to set this up. I found this setup quite easy. If I was going to lease a car or had a partner/wife that would have been a different matter.

    Remserv charge $9.70/fortnight for admin. This is a tax-deductable charge, so you can add $9.70 to the $541.92 without going over the cap.

    When setup for the automatic transfers they are very reliable. However if you are faxing the statements in, there can be a long delay before it is processed (lost faxes don't help).

    There are some rules with credit cards and cash advances/balance transfers. I believe that they consider this cash and not an expense. Make sure the statements have a balance, they don't seem to care much about the total purchases, however I believe that you can use a different method to be reimbursed if the account is paid.

    I have been told that if I were to work for a 2nd PBI I would be able to claim $30,000 from that institution as well.

    If anyone has a remuneration company which does it for less than $9.70/fortnight please let me know.

    Finally, I believe that everything should work exactly the same for people who do not work for a PBI except for the FBT limit being only $15,000.
  5. cabbage74

    cabbage74 Intern

    Mar 28, 2005
    Opps. Just read on the remseve site.
    "The benefits available vary depending on your employer."

    So Credit Card payments maynot be an option for some.

    Also I should have mentioned this earlier. It is basically up to your employer to allow you to salary sacrifice.
  6. johnsmith

    johnsmith Member

    Dec 5, 2004

    I would stay clear of Citibank if you have complicated things like this to deal with. You would be much better off with an Australian bank.
  7. bambbbam2

    bambbbam2 Active Member

    Feb 13, 2005
    Perth, WA
    I think the thing to learn here is that if you work for a certain type of employer, some examples being a charity, a hospital or a few other types, then you can salary sacrifice to a greater extent than if you work for a 'for-profit' employer.

    It's because these not-for-profits get a greatly reduced FBT liability.

    Just another quirk in our mind-boggling Tax Act.
  8. Rick93

    Rick93 Established Member

    Nov 10, 2002

    Employees (all except CASUALS) of NSW Public Hospitals got a double 'bonus' recently...

    With the amalgamation of the Area Health Services, employees were offered to become participants in the 'other' Area's scheme....

    Thus, employees got to participate in TWO salary sacrifice schemes at the same time, allowing for DOUBLE the max. $8,755. benefit.

    But anyway...

    Regarding CB's criteria for cards....

    It doesn't go by 'taxable' income.... it goes by GROSS income!

    In one year, I had a 'taxable' income of less than $10,000. however, my gross was over $100,000.

    DEDUCTIONS!!!! That makes the difference between TAXABLE and GROSS ('net' is simply what you take home, after tax has been deducted from your pay)

    It's the deductions you make against your net income, that equals your TAXABLE income.

    So, give CB the details of your GROSS income only...

    good luck... (but yes, look at an Aussie bank if you still have trouble convincing MANILA!)

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