ATO (tax office) payments by credit card

[madrooster]

Agree. The points are only of value if redeem premium cabin. I recently just flew JAL first class SYD-NRT rt for 120k Asia Miles from CC earning. That retails for well over $10k. So almost 10c/point.

The question is whether JL F SYD-NRT return is actually worth $10k. J is well under $5k return on QF J for NRT, I'd imagine JL would be similar.

 

[Beta4Me]

Agree. The points are only of value if redeem premium cabin. I recently just flew JAL first class SYD-NRT rt for 120k Asia Miles from CC earning. That retails for well over $10k. So almost 10c/point.

Is it bad that all I can think of is the fact that you could have done that 3 times for the same price if you threw in a little GUM?

 

[nutwood]

You value a point at the cost to acquire, and then at the value to burn. Then divide burn value / cost value to give you your yield.

Hard to value cost to acquire as some may be with no CC surcharge, some with 0.5%-2% CC surcharge. So lots of people use 1c/$ as a rough cost or worse/maximum cost value, as it makes the sums really easy.

In real life, when paying ATO with ANZ Black FF Visa, cost is 0.42% for 0.75, or 0.56c per point which I round down to 0.5c per point as I also have lots of expenses that attract no CC surcharge.

eg. A few years ago I bought my wife a business ticket SYD-LHR return for about 225k points on Singapore + $1.5k taxes. Retail was $8.5k, take off the taxes on both fares and you have 225k points = $7k or about 3c value per point burnt. Cost per point was about 0.5c so got 6x cost value or yield. Or that is how I do it, anyway.

When I do the calcs, I view it as paying a bit more than economy for a business class seat, eg SYD-LHR rtn $1,125+$1,500 = $2,625 v $1,600 for a Qantas economy seat, which is how I justify it to myself - I may be deluded, but I enjoy the almost 50 hours in business for the cost of an extra $1k return, or $20/hour.

Hope this helps.

That sounds like an eminently sensible way to value your points. I've never really worked out the true cost per point. There's so many variables; some are free, some cost but then I get 1.5 FF/$, sometimes there's a cash flow hiccup and I get caught paying interest on the CC. Obviously when it comes to individual large payments, as per the topic of this discussion, the sums need to be done but cost overall is tricky.
The difficulty in working out the overall cost per point, is to isolate the specific costs incurred purely in pursuit of FF points. If I wasn't chasing points, I'd still use a CC for convenience. It'd cost less, and have a lower interest charge, but I'd still use it. Probably the only change would be that I wouldn't use a card in instances where there's a fee charged, so I suppose a legitimate costing could be done by adding up the extra CC costs (fees and additional interest) and all the vendor fees, then dividing by the number of points accrued throughout the year. Be an interesting sum. Come tax time, I might even have a crack at it!

 

[shifty]

I have some large BAS payments due today, is NAB QFF Premium still working for ATO?

Has anyone had a recent points post? My last points post mid Feb was successful.

 

[angusburns]

With the Visa, 0.42c gives you 0.75 of a point, so double that to give you 0.82c gives you 1.5 points, compared to Amex where 1.45c gives you 1.5 points - costs an extra 0.63c to get the same number of points, so Visa is much cheaper.

FWIW, here are the calcs I did before I paid my ATO bills, just to make sure:
ANZ Q Amex $100k = 150k Q points = 150k Q points ATO cost is 1.45% = $1,450 = 0.96c per point
ANZ Q Visa $100k = 75k Q points = 75k Q points ATO cost is 0.42% = $420 = 0.56c per point.

Having said, that, some people do not have access to large expenses, such as ATO payments, to help earn lots of points and so need more points per dollar spent, so they pay the extra CC surcharge on Amex and get twice as many points as with Visa, at three time the cost, as 0.96c per point is still good value if you want to fly in J or F. Which can make good sense, depending on your situation.

Personally, I do not fly nearly as much as I would like, and usually earn more FF points than I burn, so for me, paying by Visa makes sense, and it is easier in my mind to justify the 1/3 immediate cost of Visa to collect still more points for a potential benefit in the future, and one that could be depreciated at any time...

Hope this helps - please 'like' this post if it did. A little social media experiment - is there anybody out there?!

 

[diningdecadence]

so they pay the extra CC surcharge on Amex and get twice as many points as with Visa, at three time the cost, as 0.96c per point

this doesn't make sense?

0.56c/point vs 0.96c/point isn't even double?

 

[FrankC]

this doesn't make sense?

0.56c/point vs 0.96c/point isn't even double?

I think he is referring to $1450 (using Amex) vs $420 (using Visa) for paying $100k of ATO tax
Not the $ per point

 

[bbqwer]

I think he is referring to $1450 (using Amex) vs $420 (using Visa) for paying $100k of ATO tax
Not the $ per point

Correct. But not all VISA provide Point for ATO payment. I have no ANZ reward black, so I got no choice to use westpac altitute black AMEX - and im still quite happy

 

[cove]

I like the idea of sharing the cost with the ATO so just imagine what 49% discount does to your costings. Now everyone's circumstances are different so some may be ineligible or have a lower tax rate than 49%.

 

[angusburns]

Sorry, perhaps not as clear as I could have been.

You are right in percentage terms, as it is 'only' 1.7x more expensive per point to pay with Amex, but what I was trying to say is that you are actually paying 3x CASH per ATO payment for the privilege.
So for a $100k ATO payment I can pay a Visa $420, or Amex $1,450, CC fee to pay the ATO by CC - I would rather keep the $1,000 today to spend on other stuff and make do with less points to use at some undefined point in the future.

If you pay the ATO with ANZ Black FF Visa you get .75 points for 0.42% or 0.42c for every dollar paid
If you pay the ATO with ANZ Black FF Amex you get 1.5 points for 1.45% or 1.45c for every dollar paid - 2x points, 3x cost per $ paid to the ATO, not per point acquired.

So for every dollar paid, you get twice as many points, albeit at three times the CASH cost.

Sorry about that, hope the above makes more sense - talking about cost per $ paid to the ATO, not cost per point earned...

 

[diningdecadence]

Sorry about that, hope the above makes more sense - talking about cost per $ paid to the ATO, not cost per point earned...

yep i figured that's what you were going for - i'm more in the camp that is interested in $/mile, rather than cost/$ - which - as you've pointed out - can be very different.

 

[PLANT]

So interesting times ahead with limited points/ no points on current cc.....
So as per other thread use the amex to buy prepaid Visa cards at 7/11....$6 load fee for double points before .49% ATO fee.... Max $1k per card...... Takes more time..... Does it work out more costly or still get the points on amex.... Bugger the cost????

 

[overtime2000]

whats the limit for prepaid visa? Cant imagine doing the reload/pay cycle dozens of time each time a BAS is due lol

 

[drross]

Domestic economy redemptions are the worst possible value IMHO.

there are domestic legs tht work well...eg BNE to Mt Isa, Cairns to Horn island

 

[ComeFlyWithMe]

there are domestic legs tht work well...eg BNE to Mt Isa, Cairns to Horn island

I never hope to have the misfortune of visiting either place again in my lifetime.

 

[drross]

I never hope to have the misfortune of visiting either place again in my lifetime.

currently Mt Isa is a frequent destination - currently have 3 of my daughters living and working there.

 

[bbqwer]

Not sure this is going to works or not:

Went to 7/11 and bought prepaid visa , cost $5.50 value upto $500 ( www.vpay.com.au ) Only can be use as online ( no physical card ). this card do have 16digit, expiry, cvv

My calculation on ATO payment:
Card value $500 ( paid with David Jones Amex , $1 = 3MR - =Converting to KF needs 2MR = 1KF ). so we have 750 KF
cost $5.50 + $2.1 ato visa fee 0.42% = $7.60

so $7.60 / 750 = $0.0101 for 1 point

Any expert , correct me if im wrong.

the downside from this vpay.com.au: 1 card need 1 email address. cant imagine IF need to purchase 10cards

 

[albyd]

Can you reload the vpay cards at 7/11? Wasn't clear from the site if can recharge them.

 

[bbqwer]

Can you reload the vpay cards at 7/11? Wasn't clear from the site if can recharge them.

Can not reload.

Need to visit different 7/11 to find other prepaid visa card. some members said, there is ANZ version, which reloadable.

 

[PLANT]

I read the ANZ cost more to load to 1k.... That is the one to get.... Not sure about reload feature