PRE-GAME Round 7 - Broncos vs Storm

[WASSHHH]

Sooo basically salary sacrifice....

No need to get all technical and jargonistic on me, I thought I made it clear I’m no accountant... haha.
But if you want to be clear, simple and make things easy rather than long, convoluted and difficult, sure!

 

[Morepudding]

I’m missing the link from where Lodge gets paid $500k, half gets sent to the family and therefore he is essentially earning $700k...

Because of Tax. If the Broncos are paying the family directly, then Lodge wouldn't be taxed. If the broncos gave the money to lodge, and then he paid the family, he would be taxed on it. Australian tax rate is 45% on income over $180k. So if lodge was to pay $250,000 himself to the family, that would actually be about $450k of income, minus the tax. So if the Broncos paid Lodge $250k, and $250k directly to the family, it would count as $500k under the salary cap, but have the same impact of lodge earning $700k. Does that make sense to you now? It's a pretty simple concept...

 

[Morepudding]

Any payment by a club towards his debt would be regarded as a fringe benefit and is taxed as such.

I can't see that not being part of the cap either.

There are so many ways around this. The most obvious of which is that the amount comes from a third party / the family signs a NDA about who is paying them. Additionally I believe as the 'debt' isnt enforceable in Australia, the likelihood of getting taxed as a fringe benefit is basically non existent.

 

[Maroon4life]

Came to read about the game but instead got to read a lot of desktop accountants solving an issue that has nothing to do with them or football.

 

[_wwong]

Can someone break this down with Bar graphs and pie charts. I also need a picture of Zach galifianakis crunching the numbers

 

[Super Freak]

It's been a pretty fucking shit week for me. That usually means the Broncos will lose to make the shit week even worse.

 

[GCBRONCO]

It's been a pretty fucking shit week for me. That usually means the Broncos will lose to make the shit week even worse.

Find a way to improve it ASAP.

 

[_wwong]

It's been a pretty fucking shit week for me. That usually means the Broncos will lose to make the shit week even worse.

Chin up champ. You're a great person and doing really well in life. We all appreciate you and your input here.

 

[BroncsFan]

No need to get all technical and jargonistic on me, I thought I made it clear I’m no accountant... haha.
But if you want to be clear, simple and make things easy rather than long, convoluted and difficult, sure!

All good your explanation actually made me think it was basically a salary sacrifice
:superhappythumbsup:

 

[ivanhungryjak]

Find a way to improve it ASAP.

Can we all chip in for a massage with a happy ending, stat?

 

[Broncos Maestro]

Real Accountant here. Can’t help but LOL at everyone’s take on $500k = $750 looks or more.

In any case I work numbers that can make $10m debt an asset for the company.

Full disclosure (though not needed or can be proven) never worked for any of the big banks but have worked/working in mid-tiered financial services businesses. Frankly glad about the Royal Commission - time people knew about their grubby practices.

 

[mitch222]

Because of Tax. If the Broncos are paying the family directly, then Lodge wouldn't be taxed. If the broncos gave the money to lodge, and then he paid the family, he would be taxed on it. Australian tax rate is 45% on income over $180k. So if lodge was to pay $250,000 himself to the family, that would actually be about $450k of income, minus the tax. So if the Broncos paid Lodge $250k, and $250k directly to the family, it would count as $500k under the salary cap, but have the same impact of lodge earning $700k. Does that make sense to you now? It's a pretty simple concept...

The Broncos wouldn't be able to make a direct payment to Lodge's victims family and claim a deduction for said payment. The payment only occurs because of a service that is being rendered by Lodge for the Broncos. Any payment would be deducted after tax has been considered in Lodges name only. You cant claim a tax deduction for a private court case otherwise people would try and claim speeding ticket fines. The money is directly linked to Lodge so any form of payment made to him or on behalf of him is taxable in his own name. That is the tax law. What you just suggested is tax evasion.

 

[Browny]

What if it’s a donation to the family’s ‘charity’?

Surely it would be tax deductible then?

 

[thenry]

Just win ffs

 

[mitch222]

What if it’s a donation to the family’s ‘charity’?

Surely it would be tax deductible then?

Have to be a registered charity to claim the tax deduction. That's what makes it funny when I see people try to claim Go Fund me donations all the time. Unless its certified its not deductable unfortunately.

 

[lynx000]

View attachment 2800
So, I think, using their numbers loosely:
- $500k would get taxed close to $250k so his in-hand income would be $250k, from which he would have to pay his debt.
$125k to debt means his $500k salary ends up being $125k.
- if he is paid $250k and the Broncos pay $250k of his debt ($500k total) his tax would be a lesser percentage than compared to $500k, let’s just say $80k for aruguments sake. So that’s $250k - $80k (= $170k) + the other $250k paid to the debt= $420k ‘in hand’.
I think the idea is that it’s far better ‘value’ or more efficient for the Broncos to pay it directly to avoid personal income tax.
I’m certainly no accountant though and very much doubt the legality of it (also, what a can of worms it opens), but am just guessing what is meant by the $700k part - which I can vaguely understand the idea behind, but cannot arrive at in any case.
:porthozthinksthisishot::porthozthinksthisishot::porthozthinksthisishot:

The payment of the amount of compensation by the Broncos would still be likely to be treated as assessable income by the ATO, therefore, it would not achieve the outcome sought.

 

[WASSHHH]

The payment of the amount of compensation by the Broncos would still be likely to be treated as assessable income by the ATO, therefore, it would not achieve the outcome sought.

You’ve got me all wrong, I’m not arguing for this point. Just outlining what I thought the original poster was trying to get at, as best as I understood it.
Regarding however the ATO would treat it; I was taught a long time ago not to argue about topics you have no knowledge of, so I’ll take your word for it!

 

[mieko]

All this rain about sucks, was hoping for a fast open game. the rain though now brings us both back to around level, we can win this, just grind them out and take the two when we can.
Cmon Broncs!!!