Salary Package - phone & Car value ?

[Ean Austral]

Gday All,

So - was wondering what value people put on a car and phone that is included in a salary package.

Car = full use 24/7 with fuel card, rego and all costs picked up by the company (if you are on holidays then you don't have the vehicle )

Phone= similar to car but with a generous monthly data limit . not unlimited .


Cheers Ean

[Homestar]

I can tell you what I get as far as this goes - although my Hilux is 100% mine 100% of the time, even on holidays - I don’t actually own a daily driver because of this, so slightly different to you. All fuel (technically they ask if we can pay for fuel if out of the state but I never have), rego, etc the car is valued at $24,000PA for 45,000km use - which is about what I do. Higher KM attract a higher rate but not sure what the difference is, I don’t have to worry about it. Vehicle is 2016 Hilux SR with Hard lid and bull bar. 4 year lease so will have it until Jan 2020 and it will probably be replaced with a similar spec Ranger then as we buy Fords now for some reason.

Phone wise last time I saw a bill (which we don’t often - occasionally we are asked to mark a bill showing personal phone calls for company fringe benefit reasons, not because we aren’t allowed to or have to pay for them). This was $340 for the month. Some data usage, but not much in the grand scheme of things.

Hope that helps?

[Toxic_Avenger]

I fall in this category, and hence the landy gets very little kays as a result. Work car is best car, as it doesn't cost me a cent.
Just moved into a 2019 Holden colorado. Duramax powahh.

The phone is a $70 a month plan, so that's $840 p.a. I don't have to pay.

For the car, purely on face value:
1 tank of diesel per week is $105, at say $1.50/L - so that's $5460p.a. just there.
The rego, insurance 2K p.a.
Maintenance, tyres, probably another 3K p.a.
So to me, a car is worth $10K... before you even look at the purchase cost of the vehicle. Which would be another $1K per month if it were to be purchased and the loan repaid.
I also don't suffer any depreciation losses on the vehicle, but as the vehicle is leased, there is no value for me when it is time to move it on.

So phone and car are approx $11K of things in my life I don't have to purchase.

On the tax side, there is the reportable fringe benefits on your payment summary, which is a value that gets grossed up (1.88x) to reflect what you'd have to pay if you were to have to pay for this yourself. While it's not taxable income per se, it affects things like medicare levy/private health rebate, HECS/HELP repayments, child support etc, if applicable... so there is a small cost.

After the tax concessions, maybe $10K 'value' ? Just my logic, there is probably an accounting method to work out actual value, but that's how I see it.

[Ean Austral]

I fall in this category, and hence the landy gets very little kays as a result. Work car is best car, as it doesn't cost me a cent.
Just moved into a 2019 Holden colorado. Duramax powahh.

The phone is a $70 a month plan, so that's $840 p.a. I don't have to pay.

For the car, purely on face value:
1 tank of diesel per week is $105, at say $1.50/L - so that's $5460p.a. just there.
The rego, insurance 2K p.a.
Maintenance, tyres, probably another 3K p.a.
So to me, a car is worth $10K... before you even look at the purchase cost of the vehicle. Which would be another $1K per month if it were to be purchased and the loan repaid.
I also don't suffer any depreciation losses on the vehicle, but as the vehicle is leased, there is no value for me when it is time to move it on.

So phone and car are approx $11K of things in my life I don't have to purchase.

On the tax side, there is the reportable fringe benefits on your payment summary, which is a value that gets grossed up (1.88x) to reflect what you'd have to pay if you were to have to pay for this yourself. While it's not taxable income per se, it affects things like medicare levy/private health rebate, HECS/HELP repayments, child support etc, if applicable... so there is a small cost.

After the tax concessions, maybe $10K 'value' ? Just my logic, there is probably an accounting method to work out actual value, but that's how I see it.

Thanks - you came up with the same figure as me .

Cherrd Ean

[Tote]

The other thing you need to consider is whether having access to the company car will lower the number of vehicles you already own. I've had company cars over the years and have done pretty well out of them from a running cost perspective but have still had the rego costs of my Landy at the time and my old ute so the fixed costs of those stay.
When I had a car the value increase to my salary was 16K per annum but this was a few years ago now.
One think you need to be aware of if you have a family is that the grossed up value is shown on your group certificate and counts against any middle class welfare that you may be entitled to such as childcare eligibility.
Regards,
Tote

[Homestar]

Thanks - you came up with the same figure as me .

Cherrd Ean

Yep, Toxics equation is about right - the figures I used also take into account the purchase price of the vehicle which my company takes into account. Take that out and it's very close.

My phone bill is extreme as I can spend more than 4 hours a day on it at times. Not uncommon to call a customer and still be on the phone with them an hour later. [bigwhistle]

[scarry]

Your phones seem a bit expensive?

Our phones cost $49/month,unlimited calls(in Australia),heaps of data,don't know how much,but we never run out.Telstra.

We do buy our phones outright,though,so not included in plan.We find doing this suits us.

As for company vehicle,what others say is on the money.

All our cars are company vehicles[bighmmm]

[Homestar]

Your phones seem a bit expensive?

Our phones cost $49/month,unlimited calls(in Australia),heaps of data,don't know how much,but we never run out.Telstra.

We do buy our phones outright,though,so not included in plan.We find doing this suits us.

As for company vehicle,what others say is on the money.

All our cars are company vehicles[bighmmm]

Yeah, haven’t seen a bill in years - that was the last one I saw. Make around 50 calls a day plus data - no idea what it should cost nor care as I’ve never been hassled about it. 😁

[Toxic_Avenger]

The corpo plan we are on is a flat $70 per month. Includes a modestly recent handset, and all data and calls are shared through the pool of users IIRC. So, I've had some monster months, but still only ever sat at $70.
Another down side for me is the phone is locked with some MDM software so the phone can be remotely killed if lost, and big brother can watch my every move. Car is packed with dashcams, fire extinguishers, safety triangles and first aid kits to keep the HSE chaps happy.

As for a company car saving me on other cars... I own 3 cars, so this logic of savings elsewhere is false [bigwhistle]. I like to think of it as a safety net. if I get made redundant tomorrow, I've got a ride to get me to my next job interview, or something to sell if I need the cash. The joys of working for a, faceless big multinational.

Overall, if I was offered more money in lieu of the car, Id probably keep the car. It's an overall better deal IMO.

[Toxic_Avenger]

...also worth noting, I'm working off what we call a 'job facility vehicle' which is fully company funded.
You can also go the salary sacrifice route, which can have additional tax breaks, where the vehicle is leased by, and owned by you, rather than the company. Never had one, but I believe that in this case, the lease costs are pre-tax, and the residual value once the lease is up belongs to you- so when your vehicle lease is up, you saell the car and keep the profits. Just don't go buying a freelander [biggrin]

For comparing this kind of stuff, the finance calculation to use is "net present value".
Weigh up the future costs (cashflows positive or negative) of two propositions or purchasing decisions, then offset them with the cost of capital... ie compare it to the benefit gained over other suitable investments- like having $50K in the bank earning interest, or your share portfolio average growth rate... This can bring both options back to a dollar value in 'today's money' and help make a more informed decision.

[rick130]

...also worth noting, I'm working off what we call a 'job facility vehicle' which is fully company funded.
You can also go the salary sacrifice route, which can have additional tax breaks, where the vehicle is leased by, and owned by you, rather than the company. Never had one, but I believe that in this case, the lease costs are pre-tax, and the residual value once the lease is up belongs to you- so when your vehicle lease is up, you saell the car and keep the profits. Just don't go buying a freelander [biggrin]

For comparing this kind of stuff, the finance calculation to use is "net present value".
Weigh up the future costs (cashflows positive or negative) of two propositions or purchasing decisions, then offset them with the cost of capital... ie compare it to the benefit gained over other suitable investments- like having $50K in the bank earning interest, or your share portfolio average growth rate... This can bring both options back to a dollar value in 'today's money' and help make a more informed decision.

I'm pretty sure the mob I last worked for paid $1000/month plus the company fuel card for those that used/leased their own ute.
That tallied with my rough back of the envelope calc reckoning my company BT50 was worth $12-$14k to me as we could use it for private use, the proviso being we fuelled it if leaving Canberra.

[Toxic_Avenger]

Mine is 'reasonable personal use'. The policy to the letter is that fuel is purchased at '500km from your area of operations'... which for me means 500km from lightning ridge, coonabarabran, scone, dorrigo, and Tenterfield.
I don't push the limits, just see family once a months in Newcastle 300km away.

[Homestar]

I’ve driven mine to Adelaide, Sydney and everywhere in between. Tow my van up to the river, and down to Mums - both 4 hour trips. I am quite lucky in my role though - currently they need me more than I need them. Not sure how long this will last, so I’ll make the most of it before a robot takes my job.... 😁

[weeds]

When you’re signing up for a salary I don’t think there is a set formula and every organization is different.

My current job was my first with a car.....I had no idea and accepted the ‘package’, I’m a little easier now but not sure I would have been able to negotiate anything better.

Phone wasn’t taken into account......plus I never own a personal phone.

Not sure if it’s a question you need to ask, and not that I understand it but ask who pays the fringe benefit.

[Toxic_Avenger]

Not sure if it’s a question you need to ask, and not that I understand it but ask who pays the fringe benefit.

By definition, a fringe benefit is a benefit provided by employers to their employees in excess of $2000, and may be in addition to, or part of, their salary or wages package.
FBT is separate to income tax and is calculated on the taxable value of the fringe benefits provided, with the FBT 'year' run between 1 April to 31 March (out of phase with the financial year). So the employer pays the benefit, and the employee is taxed accordingly, with the tax cost relative to their individual situation.

So, when OP is looking for the value of a vehicle included as part of a salary package, then it's a fringe benefit, and covered by the employer.
If any portion of it is covered by the employee, then the value is adjusted accordingly (ie employee covers every second tank of fuel, or running costs over $500 per month). In this case, costs become a liability and detract from value. So that's the devil in the detail.

[fitzy]

The auto clubs take turns putting these out, seems on the money
https://www.racq.com.au/-/media/racq/pdf/cars-and-driving/2017-running-costs-pdf