Forums / Getting Technical / Legal & Accounting / Credit card salsary sac to pay a mortgage?

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  • Profile photo of gammonbrusgammonbrus
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    @gammonbrus
    Join Date: 2008
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    Hi all, I remember hearing somewhere that you can salary sac a credit card, then use it to say pay rent or your mortgage and it ends up that you save money that way. Now I dont have a credit card so no idea what interest rates are, but it makes logical sense especially as you start to hit that next tax threshold as your salary increases. Anyone had experience in this? I guess it depends on where you work, but lets say they let you salary sac a credit card just to make it easier.

    Profile photo of v8ghiav8ghia
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    @v8ghia
    Join Date: 2005
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    Hi,

    Most people would salsac to the actual homeloan itself! Then, if you have all your loans paid off, some places allow you to have a sal sac a fixed payment to your a/your credit card, and you would simply use this for normal living expenses /bills etc, and then pay the extra amounts due over and above your employer payment amount yourself.

    Cheers

    Profile photo of Jacqui MiddletonJacqui Middleton
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    @jacm
    Join Date: 2009
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    Some employers might offer this, but definitely not all.  I know (some of?) the medical industry does, and not for profit organisations (ie charities such as The Red Cross.

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
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    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of TerrywTerryw
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    @terryw
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    Salary sacrifice a credit card? What do you mean? Does the employer just pay the credit card for you each month by reducing the taxable wage by the same amount?

    If you pay a loan with a credit card then you would need to do a cash advance and then use the cash to pay. No lender would take the credit card payment. Same with rent, the real estate agent may be able to charge a credit card, but they would want the card fee added on the transaction – 1-2% usually.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
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    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of v8ghiav8ghia
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    @v8ghia
    Join Date: 2005
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    Terryw wrote:
    Salary sacrifice a credit card? What do you mean? Does the employer just pay the credit card for you each month by reducing the taxable wage by the same amount?

    If you pay a loan with a credit card then you would need to do a cash advance and then use the cash to pay. No lender would take the credit card payment. Same with rent, the real estate agent may be able to charge a credit card, but they would want the card fee added on the transaction – 1-2% usually.

    Hi Terry,

    Not all do, but what happens is that the employer, who generally would be govt such as nursing / hopsital, ay have a fixed salpac amount, of say $360 per fortnight – which can be paid direct into a home loan account. If not loan account is available, they in turn pay this same amount into a credit card account instead, as the PAYG employee may nominate. It is the fixed amount, so anything over the flat amount would need to be paid as per the normal process by the employee. I have seen quite a few do this, but always health services staff, and in turn many are not aware that it can be an option.

    Cheers.

    Profile photo of gatsbygatsby
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    @gatsby
    Join Date: 2003
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    I salary sacrafice my credit card. $617 of my pre tax fortnightly pay goes onto my card, as it could to my PPOR mortgage, rent, utility bills. You cannot however salary sacrafice the repayments of an investment property. Well at least the company we out source salary sacrafice to won't.
    Cheers,
    Gats!

    Profile photo of TerrywTerryw
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    @terryw
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    Hi Guys

    I didn't know you could do that. What about FBT?

    I have also heard that there are special rules for people working for charities and hospitals etc because of special tax exemptions those entities have.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

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