60k Salary Sacrifice
Employee saves $16,900 – Income Tax @ 24% ($12,400) PLUS FICA $4,500)
Employer buys $40k of CC services – saves $4,590 FICA on $60k
CC pays Income Tax $8,400 *(21%)
Employer .provides temporary finance to worker $4,000
CC lends $16k to Worker for Personal 401k Contribution
Worker gets rebate $4,000 for $20k (max) 401k Investment
Repays Employer $4,000
Employer makes matching contribution $20k using retained salary _No tax to worker who saves income tax and FICA on $30k of Salary Sacrifice *($7,200 + $2.750)
Employer get tax saving of $4,200 for 401k contribution.
Worker borrows $20k from 401k to REPAY CC $20k
CC has $51,600 – from worker $20k Loan Repayment (no tax) Plus $31,600k ($40k less tax of $8,400)
CC Lends Worker $36,000 to meet personal expenditures (reduced cash after Salary Sacrifice)
cc RETAINS $ 51 ,600 – $36,000 = $15,600
$10,000 Reinvested in to Employer Business with 30% equity – body guarding in JV under CC Control
Has to make $20k a year to ensure funds are there year 5 and on to ensure repayment of 401k loans.
CC expenses $1,600
$4,000 Invested for future distributions;
Agents $2,000 –
- First Line Capital Loan zero interest (5 years)
- Second Line – $500 – Expense Allowance
- Third Line – $500 Over-ride (10 year loan)\
- Agents pay no tax on loan amounts – only on allowances and maybe on investments if they are not too smart.
An alternative to spending the $10k on marketing is to amalgmate capital for acquisitions and accelerate scaling