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How much is the total tax payable before salary sacrifice

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Question - Adam and Sarah are married and have two children. They recently purchased private health cover. Sarah is a homemaker and Adam works in a telecommunication company. Adam receives annual remuneration of $98,000 and $12,286 per annum in allowable deductions. He has $100,000 worth of shares of a large company, producing a 3% annual dividend yield (fully franked). He is concerned about saving for retirement and has decided to salary sacrifice $10,000 annually to superannuation. Considering all the Medicare levies and offsets, answer the following questions.

Required -

-How much is the total tax payable before salary sacrifice arrangement?  

-How much is the total tax payable after salary sacrifice arrangement?      

-Is it worthwhile for Adam to salary sacrifice $10,000? Explain.  Given the availability of the age pension, why does Adam need to save through his superannuation fund for retirement?

Reference no: EM133016208

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