When Is A Bucket Company Worth It?

A webinar attendee has said, “In the future, the personal income tax rate will reduce for most people to around 30%.”

Yes, we have been signalled by previous budget releases, but we still have a high marginal tax rate which is still above the $180K of income or more. You still pay probably 47% or similar, but the 30% tax rate will be a lot larger. The band will be from memory from about $45k to maybe $180k, or $120K. It is a larger band which should be similar to a company tax rate.

“Considering the admin fee (accounting fees of running a company) how much profit is worth to set up a company structure as a bucket company? So, when is it worth having a bucket company?

This really comes down to the family situation. $120K right now is where the tax rate goes from 34.5% to 39% tax. So at that stage, if it’s just you,  it’s already better off to go to a company. But if you can spread income between you, your spouse, and if you have adult children that we can give some money to, then the cost benefit of a bucket company might only come into play at $300K, $400K, or $500K in profits.

Watch the full webinar, ‘Solving Company Loads Division/7A Problems ’ at https://learning.benwalker.com/courses/solvingcompanyloansD7AP

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