Salary Sacrifice Impact on Borrowing Capacity

My workplace has the option of salary sacrificing. I've looked at the numbers and obviously I would be saving myself income tax by taking this option. Before I sign up to it though I was just wondering whether it would have a positive or negative impact on my borrowing capacity?

Cheers.

 

Salary sacrificing is fine since "it can be stopped at anytime". Ensure that the broker or banker covers this proactively in their submission notes rather than credit raising this as if they do this they will then start requesting unnecessary documentation.

 

Not a problem so long as you're not salary sacrificing for an ongoing commitment such as a novated lease.

 

What were you thinking of sacrificing? Just Super?

 

The wife & kids

 

If I salary sacrifice an additional 10% of my pre-tax salary into Super, say for OCT, NOV 2015, my payslips shows a reduced annual income on the top part of the slip. So when I give payslips for OCT, NOV 2015, banks always come back and query has my salary dropped. For this reason I do NOT salary sacrifice in the months where I may need to submit payslips to bank/broker.

 

They will query it, but it is a simple answer to them and they should then take the income without salary sac.

 

Thanks! That's good to know

 

I do salary sacrifice but I let my broker know that if I cancel the salary sacrifice it will be cancelled immediately. He has passed the information on to the bank and it has not been an issue.

 

thanks, it was not clearly communicated to me earlier by my broker. But I have stopped salary sacrificing since early this year, I figured I'm better off putting all surplus $$$ into my PPOR.

 

Oh, yes. I don't have any non-deductible debt, which is why I salary sacrifice.

 

Should have been the other way round.

Your Broker should be looking at your payslips and asking you the question on the deductions rather than letting it going to credit and them raising the question as to whether it is an ongoing commitment.

Cheers


Richard

 

If the sal sac can be stopped at any time (ie. it's voluntary super contributions, etc) then all good - it won't effect borrowing capacity.

If you've salary sacrificed the latest VW golf....that will hinder your capacity.

Cheers

Jamie

 

Thanks for all the replies. The purpose is just for daily living expenses- food, petrol etc.

 

I salary sacrifice $16 000 a year toward my mortgage because I work for a not for profit. It means my net income is the equivalent of someone else earning $10k gross more.

I'm pretty sure it helps with servicing rather than hinders.

Don't know why it would hinder servicing considering it means you have more money.

 

If it helps my other half also salary sacrifices. Basically it seems to me like a money go round. Work deducts x amount from her wage and the salary sacrificing company (Maxia) pays x amount (which is more than the amount deducted from her wage) back into her account.

We nominated with Maxiaa that the salary sacrificing amount was to be paid off some non-deductible debt. But they don't pay that amount every fortnight directly onto the debt, they pay it into my other half's bank account.

When we applied for our IP we just had to show the Maxiaa slip.

So yeh, surely that would be better for serviceability as net income is higher?

 

[QUOTE="Jamie Moore, post: 75265, member: 14" If you've salary sacrificed the latest VW golf....that will hinder your capacity.

In more ways than one....

 

Salary sacrifice when working for a charity or registered nonprofit is marginally better than ordinary taxation, if you can prove it to the assessor. Unfortunately it can depend on which assessor you get, few lenders have policies in this regard. The income is still taxed, it's fringe benefits tax paid by the employer.

 

Correct me if I'm wrong, but you can only do this if you work in the health industry or for a non-profit organisation?