Each year, I report on income and spending for the Australian financial year, which runs from 1 July to 30 June. This makes it easy to do a break down of gross income including taxes that's comparable to many you'll see online, though all our numbers are in Australian Dollars. Here is last year's report. At the top level we can break down total gross income (as reported in our tax returns plus employer superannuation contributions that are paid on top of nominal salary) into the following categories of spending (click on the image to read more easily):
The gross income for this year (bottom line) is just an estimate. It is based on the gross income we expect to report in our tax returns (before investment expenses etc.) plus employer superannuation contributions. Gross income is forecast to rise by 9% this year after falling for three years. Of course, adjusted for inflation it is still below the 2020-21 peak.
Tax includes local property tax as well as income tax (projected) and tax on superannuation contributions. Income tax is expected to rise by 19%! This is because we have run out of capital losses to offset capital gains. Investing costs include margin interest. Mortgage interest is included in spending, while mortgage principal payments are considered as saving. Spending also includes the insurance premia paid through our superannuation. Current saving is then what is left over. This is much bigger than saving out of salaries because gross income includes investment returns reported in our tax returns. The latter number depends on capital gains reported for tax purposes, so is fairly arbitrary. Spending fell for the first time since I started this spreadsheet, by 4%. Mortgage principal saving doubled, because we are keeping more money in our offset account, reducing mortgage interest payments. Graphically, the breakdown above looks like this:
We break down spending into quite detailed categories. Some of these are then aggregated up into broader categories as shown here:
Here, I include mortgage interest in housing spending. In the accounts I report at the end of the calendar year I include it in investment costs. The idea of including interest in housing costs here is to make this spending report more similar to others on the web.
Our biggest spending category, if we don't count tax, is now childcare and education, which continues to trend upwards. As mentioned above, the income and tax numbers are all estimates. Commentary on each category follows:
Employer superannuation contributions: These include employer contributions (we don't do any salary sacrifice contributions) but not concessional contributions we paid to the SMSF this year.
Superannuation contributions tax: The 15% tax on concessional superannuation contributions. This includes tax on our concessional contributions to the SMSF.
Franking credits: Income reported on our tax returns includes franking credits (tax paid by companies we invest in). We need to deduct this money which we don't receive as cash but is included in gross income. Foreign tax paid is the same story.
Income tax is one category that has fallen since 2017-18! But it has been offset by increasing franking credits, which inflate top line income, and superannuation contributions tax.
Life and disability insurance: I have been trying to bring this under control and the amount paid has also fallen since 2017-18 a result.
Health: Includes health insurance and direct spending. Spending peaked with the birth of our second child.
Housing: Includes mortgage interest, maintenance, and body corporate fees (condo association). It is down this year because we parked more cash in our offset account reducing the mortgage interest we need to pay.
Transport: About 60% is spending on our car and 40% is my spending on Uber, e-scooters, buses etc.
Utilities: This includes water, gas, electricity, telephone, internet, and online storage etc.
Subscriptions: Includes all payments for online electronic services that aren't basic infrastructure. It's has levelled out after increasing sharply during the pandemic.
Supermarkets: Includes convenience stores, liquor stores etc as well as supermarkets. It has been constant for the last four years.
Restaurants: This was low in 2017-18 because we spent a lot of cash at restaurants and during the pandemic for obvious reasons. It has now levelled out. In fact we spent quite a bit on restaurants while travelling in China and Thailand that either came out of Chinese accounts that aren't included here or in cash.
Cash spending: This is up strongly this year due to spending in cash in Thailand.
Department stores: All other stores selling goods that aren't supermarkets. No real trend here.
Mail order: This has come down over the last four years. We now get mail order direct from China, which is paid for from China and doesn't enter these accounts.
Childcare and education: We are paying for private school for both children now, plus music classes, swimming classes...
Travel: This includes flights, hotels etc. It was very high in 2017-18 when we went to Europe and Japan. In 2020-21 it was down to zero due to the pandemic and having a small child. It again rose this year as we travelled to Queensland in July 2024 and China and Thailand in 2024-25.
Charity: Not much trend.
Other: This is mostly other services. It includes everything from haircuts to professional photography.
This year's reduced spending was mainly driven by reduced interest and education costs.
