The government’s plans to introduce a 32.5% tax on backpacker workers have hit the rocks after sustained pressure. Rather than the proposed 32.5% tax rate, holidaymakers will now be taxed at 19%, from January 1, 2017. One clause remains, however – holidaymakers will be taxed from the first dollar earned.
If you offered somebody an out from the daily commute, flexible working hours or a chance to turn their inherent skills into a personal business, they would probably bite your fingers off in their hurry to grab hold of that offer. For many people, the idea of working at home offers better prospects when considering work-life balance.
Data released by the Australian Bureau of Statistics (ABS) reveals that about 3.5 million workers do some measure of work from home either for their proper job or their business. And if past figures are anything to go by, this trend will only continue to grow with the help of technology.
There are countless quotes and proverbs from around the world that talk about preparing for tomorrow today. Sadly, it seems not enough people imbibe the message, especially when it comes to money. Millennials seem to be the most culpable. It seems the general thinking among this cohort of young people is “Why should I keep the money for a future version of me, when I can spend the money on cars, holidays, traveling, and dinners that my present self wants? My retired self will sort himself out when it’s time to cross the proverbial bridge”.
It can be very odd to get a salary raise and the gains of the raise are swallowed by a change in your tax bracket. You’re not alone, though, and the fact that a phrase – “Bracket Creep” – exists for it is perhaps consolation. Creating smaller tax brackets and adjusting taxes for inflation are some of them measures the government has taken to combat the effects of bracket creep, but unfortunately, many hard-working citizens are still affected. Because it is not an outright tax increase or other more “malevolent” forms of income reduction, many people are unaware of how much damage bracket creep can do to their incomes. Here’s an illustration of how it works:
