Self-funding endorsements
Thread Starter
Join Date: Nov 2005
Location: 'straya!
Posts: 217
Likes: 0
Received 0 Likes
on
0 Posts
Self-funding endorsements
Firstly!
I just want everyone to know that I love my job, that I have at the moment (twin charter). It pays the award, which is enough for me - and I am able to save and have a second job(by choice).
While I'm happy, there's not way in heck I'm coughing up 30k-40k to have the privelige of flying around someone else's customers.
IMHO - what an insane idea, an airline makes you pay for the privelige of carrying around THEIR passengers.
Who in their right mind would become a pilot nowadays to spend
-50k-60k on CPL and ME-CIR
-throw in a coupla renewals and twin endorsements, 5-9k
- yay! job with turboprop, another 10-15k (bonding too?)
- yay! job with Jokestar or Tigger, 35k goodbye, only to earn the same money what the dudes sweeping floors at Holden earn!
Is this why there is a pilot shortage?? Am I the only one who is prepared to wait until airlines get with the program?
I'm not stupid am I? Surely there are other guys who think it's utter non-sense to fork out for endorsements. Bonding I am okay with, that's fair. But in my opinion, it's their customers, they pay the money to keep the crews, and keep the experience.
I just want everyone to know that I love my job, that I have at the moment (twin charter). It pays the award, which is enough for me - and I am able to save and have a second job(by choice).
While I'm happy, there's not way in heck I'm coughing up 30k-40k to have the privelige of flying around someone else's customers.
IMHO - what an insane idea, an airline makes you pay for the privelige of carrying around THEIR passengers.
Who in their right mind would become a pilot nowadays to spend
-50k-60k on CPL and ME-CIR
-throw in a coupla renewals and twin endorsements, 5-9k
- yay! job with turboprop, another 10-15k (bonding too?)
- yay! job with Jokestar or Tigger, 35k goodbye, only to earn the same money what the dudes sweeping floors at Holden earn!
Is this why there is a pilot shortage?? Am I the only one who is prepared to wait until airlines get with the program?
I'm not stupid am I? Surely there are other guys who think it's utter non-sense to fork out for endorsements. Bonding I am okay with, that's fair. But in my opinion, it's their customers, they pay the money to keep the crews, and keep the experience.
Sprucegoose
Join Date: Sep 2000
Location: Hughes Point, where life is great! Was also resident on page 13, but now I'm lost in Cyberspace....
Age: 59
Posts: 3,485
Likes: 0
Received 1 Like
on
1 Post
I agree 100% 2p2d, while it may save the company a little, it doesn't save them a lot, but it does cost them a lot in good will. The total cost of getting a new hire up to speed would have to be in the $100-150K ballpark, the 35K would mean a lot to prospective employees, especially those who are just starting to establish their adult lives, kids, mortgage, etc...
I'm there with ya! Just don't tell the airlines that...
PS: Interestingly I know a number of people in their late 40's (up to 49), who have been called recently for airline interviews, some of these people have been applying for up to 10 years!
Am I the only one who is prepared to wait until airlines get with the program?
PS: Interestingly I know a number of people in their late 40's (up to 49), who have been called recently for airline interviews, some of these people have been applying for up to 10 years!
Join Date: Feb 2007
Location: Down South
Posts: 175
Likes: 0
Received 0 Likes
on
0 Posts
If the airlines asked you to pay for your endorsement and then pay them a hundred dollars a week for the privilage to work for them then im sure the queue would still be a mile long to get in.
Guess im just cynical but then again its pilots doin what they do best.
Regards The Dog
Guess im just cynical but then again its pilots doin what they do best.
Regards The Dog
Join Date: Nov 2004
Location: 41,000'
Posts: 279
Likes: 0
Received 0 Likes
on
0 Posts
It 'is' all starting to change, pretty quickly actually. Many guys are going up to their regional bosses and asking for more cash. They are still being bonded the same but at the end of the day they are basically getting what they ask for. Not quite a 6 figure sum like you would get working for a major in Australia, but its not a kick in the teeth either.
If you want to stay in the same location, you enjoy your flying and don't get angry and crusty when you may have to do one extra flight at late notice, then its all starting to unfold in your lap. Put in those hard yards now, you will get the rewards.
But go and ask for better pay and conditions now! Go in and highlight your assets, if they say no, then you have tried. The more people that try, the better for everyone.
If you want to stay in the same location, you enjoy your flying and don't get angry and crusty when you may have to do one extra flight at late notice, then its all starting to unfold in your lap. Put in those hard yards now, you will get the rewards.
But go and ask for better pay and conditions now! Go in and highlight your assets, if they say no, then you have tried. The more people that try, the better for everyone.
Join Date: Mar 2006
Location: Oz
Posts: 56
Likes: 0
Received 0 Likes
on
0 Posts
When I went through the stages most companies did their own in house endorsements, training with no payment or bond; But I still bought an endorsement or two when required(even without a job lined up.)when I had the min hours to score a job on the type. This pushed me up the ladder much quicker than my peers. This practice has been done for years & gives you an advantage. Unfortunately now airlines erode the salary & conditions down too so the money to reagain the loss takes slightly longer. Remember, done correctly the endorsement costs are 100% tax deductible(don't be bullied by the ato). I do not believe a warm fuzzy company environment exists anymore & corporate greed & shareholders dictate the salaries. More than that is the endless supply of pilots available(yes the lack of higher qualified pilot is lowering a bit). Pilots need to do their sums & if they can score a step up, they should do so. Salaries will go up gradually again & if you hold out everyone else will leave those unwilling to compromise behind.
Tax Changes
With the changes to the tax scales over the last few budgets, the amount that you get back for your endorsement from the ATO has been considerably reduced (depending on what your salary is on completion). A cruise F/O (ie Second Officer) with Onestar Intl would only get a small percentage back from the ATO.
With Virgin, Tiger, Onestar currently employing, and Qantas about to start employing (in very significant numbers), every applicant should be telling these airlines to pay for the endorsement as there are options.
With Virgin, Tiger, Onestar currently employing, and Qantas about to start employing (in very significant numbers), every applicant should be telling these airlines to pay for the endorsement as there are options.
Well dont hold your breath on the ATO "not" eventually recovering the tax refund you claimed for the endorsement. Technically speaking you cannot claim a tax refund for an expense (endorsement training) where that cost is paid to the same organisation as that which pays your wages. In this case you havnt really incurred an expense, you have merely worked for less. It's only a matter of time before the ATO moves on those who have claimed this deduction, however they won't do that until the back tax applies to a sufficient number of you.
Xeptu - the costs of endorsements in most cases are not paid to the organization that then employs you.
Eastern or Sunstate (as they are still the ones employing you) employment - Usually paid to Qantas
Virgin & Jetstar employment usually Alteon or now Air New Zealand for A320.
I have heard now that the ATO is disallowing these deductions in many cases but when challenged and a hearing date set the ATO is backing down at the last minute and not contesting the deduction. AFAIK the AFAP has more info on this.
Eastern or Sunstate (as they are still the ones employing you) employment - Usually paid to Qantas
Virgin & Jetstar employment usually Alteon or now Air New Zealand for A320.
I have heard now that the ATO is disallowing these deductions in many cases but when challenged and a hearing date set the ATO is backing down at the last minute and not contesting the deduction. AFAIK the AFAP has more info on this.
I'm hearing you and am aware whats been happening taxwise over this issue, the reason the ATO backs down is because the recovery doesnt justify the cost as this issue doesnt apply to enough people. "yet"
If you did your training with Alteon and subsequently employed by an operator where there is no financial link between the two organisations, no problem, bonafide expense and therefore tax deduction.
The ATO would have fair argument in the case of say Jetstar where a new hire is type rated and trained by Qantas, because Jetstar is wholly owned and underwritten by Qantas.
Argument aside this won't be truly tested by the ATO until there is about $10m in back taxes to be collected.
The better path to follow is that the company pays for the training and keeps the tax deduction, in return pays a training wage to offset the cost or risk. Win Win for everyone.
Of course, personally I still believe that training is a cost the employer should meet in any case in any industry, I see it as a fundamental investment in the future of Australia and its people.
Employers whine about skills shortages, but they don't want to train anyone either, so who pays in the end, we do.
There is no skills shortage in Australia, it's more of a case of there is a shortage of skilled people willing to work for $15 per hour.
If you did your training with Alteon and subsequently employed by an operator where there is no financial link between the two organisations, no problem, bonafide expense and therefore tax deduction.
The ATO would have fair argument in the case of say Jetstar where a new hire is type rated and trained by Qantas, because Jetstar is wholly owned and underwritten by Qantas.
Argument aside this won't be truly tested by the ATO until there is about $10m in back taxes to be collected.
The better path to follow is that the company pays for the training and keeps the tax deduction, in return pays a training wage to offset the cost or risk. Win Win for everyone.
Of course, personally I still believe that training is a cost the employer should meet in any case in any industry, I see it as a fundamental investment in the future of Australia and its people.
Employers whine about skills shortages, but they don't want to train anyone either, so who pays in the end, we do.
There is no skills shortage in Australia, it's more of a case of there is a shortage of skilled people willing to work for $15 per hour.
Thread Starter
Join Date: Nov 2005
Location: 'straya!
Posts: 217
Likes: 0
Received 0 Likes
on
0 Posts
Nice post X
I'm trying to justify, or make sense of why pilots are the ones that always 'cop it' in the end, especially financially.
Do flight attendants have to pay for their training/standardisation? Are they bonded?
Are ground ops the same? Refuellers? White collars? Ops? Gingerbeers?
I'm trying to justify, or make sense of why pilots are the ones that always 'cop it' in the end, especially financially.
Do flight attendants have to pay for their training/standardisation? Are they bonded?
Are ground ops the same? Refuellers? White collars? Ops? Gingerbeers?
The trick with claiming expenses is that they must be incurred to further your earning ability with your current employer. This is spelled out specifically in the ATO docs. Therefore, you need to be hired then pay for the endorsement. If you buy the endorsement and then get hired, no deduction!
thats actually changed now mate! that used to be the case, however provided you hold at least a commercial licence any expense you incur for it is tax deductable, employed or not.
Xeptu
Incorrect. The ATO doesn't care if you did your self funded training with your current employer or not. For the record Self-education expenses are expenses related to a course of education provided by a school, college, university or other place of education (This can be your current employer). You must have undertaken the course to gain a formal qualification for use in carrying on a profession, business or trade or in the course of employment.
Again incorrect. You can only claim self-education expenses that related to your work as an employee at the time you were studying. If your self-education was to help you get a new job, you cannot claim your expenses.
Now admittedly this is only an ATO ruling but if you want to buck the ruling you had better be prepared to take the ATO to court. Now as for the reason the ATO are in the end allowing these endorsement costs, you would have to look at each ruling on a case by case basis.
Technically speaking you cannot claim a tax refund for an expense (endorsement training) where that cost is paid to the same organisation as that which pays your wages.
thats actually changed now mate! that used to be the case, however provided you hold at least a commercial licence any expense you incur for it is tax deductable, employed or not.
Taxation Ruling
TR 98/9
Income tax: deductibility of self-education expenses
Ruling
PART A
Circumstances in which self-education expenses are allowable
Section 8-1 of the ITAA 1997
12. Self-education expenses are deductible under section 8-1 where they have a relevant connection to the taxpayer's current income-earning activities.
13. If a taxpayer's income-earning activities are based on the exercise of a skill or some specific knowledge and the subject of self-education enables the taxpayer to maintain or improve that skill or knowledge, the self-education expenses are allowable as a deduction.
14. If the study of a subject of self-education objectively leads to, or is likely to lead to, an increase in a taxpayer's income from his or her current income-earning activities in the future, the self-education expenses are allowable as a deduction.
15. No deduction is allowable for self-education expenses if the study is to enable a taxpayer to get employment, to obtain new employment or to open up a new income-earning activity (whether in business or in the taxpayer's current employment). This includes studies relating to a particular profession, occupation or field of employment in which the taxpayer is not yet engaged. The expenses are incurred at a point too soon to be regarded as incurred in gaining or producing assessable income.
16. In practice, the above principles do not always operate on a mutually exclusive basis. It is always necessary to have regard to the words of section 8-1 and apply them to the facts.
17. An expense is deductible under section 8-1 when it has the essential character of an income-producing expense. The essential character is to be determined by an objective analysis of all the surrounding circumstances. There are circumstances where apportionment under section 8-1 is required. For example, if a study tour or attendance at a work-related conference or seminar is undertaken for income-earning purposes and for private purposes, it is appropriate to apportion the expenses between the purposes. If the income-earning purpose is merely incidental to the main private purpose, only the expenses which relate directly to the former purpose are allowable. However, if the private purpose is merely incidental to the main income-earning purpose, apportionment is not appropriate.
TR 98/9
Income tax: deductibility of self-education expenses
Ruling
PART A
Circumstances in which self-education expenses are allowable
Section 8-1 of the ITAA 1997
12. Self-education expenses are deductible under section 8-1 where they have a relevant connection to the taxpayer's current income-earning activities.
13. If a taxpayer's income-earning activities are based on the exercise of a skill or some specific knowledge and the subject of self-education enables the taxpayer to maintain or improve that skill or knowledge, the self-education expenses are allowable as a deduction.
14. If the study of a subject of self-education objectively leads to, or is likely to lead to, an increase in a taxpayer's income from his or her current income-earning activities in the future, the self-education expenses are allowable as a deduction.
15. No deduction is allowable for self-education expenses if the study is to enable a taxpayer to get employment, to obtain new employment or to open up a new income-earning activity (whether in business or in the taxpayer's current employment). This includes studies relating to a particular profession, occupation or field of employment in which the taxpayer is not yet engaged. The expenses are incurred at a point too soon to be regarded as incurred in gaining or producing assessable income.
16. In practice, the above principles do not always operate on a mutually exclusive basis. It is always necessary to have regard to the words of section 8-1 and apply them to the facts.
17. An expense is deductible under section 8-1 when it has the essential character of an income-producing expense. The essential character is to be determined by an objective analysis of all the surrounding circumstances. There are circumstances where apportionment under section 8-1 is required. For example, if a study tour or attendance at a work-related conference or seminar is undertaken for income-earning purposes and for private purposes, it is appropriate to apportion the expenses between the purposes. If the income-earning purpose is merely incidental to the main private purpose, only the expenses which relate directly to the former purpose are allowable. However, if the private purpose is merely incidental to the main income-earning purpose, apportionment is not appropriate.
Join Date: Jan 2007
Location: Down Under
Posts: 34
Likes: 0
Received 0 Likes
on
0 Posts
I rang and spoke to an ATO person about this subject about three weeks ago. I was told that if you are currently employed and can legitimately argue that the course (A320 endorsement) will assist you in your CURRENT employ, then it can be claimed. He told me that you CAN NOT claim the expense if you are using it to get a different job, or are not employed at the time the expense was incurred.
So, if you can say that the type rating improved your professional knowledge and development (ie self education) in your current job, then it is a legitiment claim.
http://www.ato.gov.au/individuals/co...tent/18843.htm
So, if you can say that the type rating improved your professional knowledge and development (ie self education) in your current job, then it is a legitiment claim.
http://www.ato.gov.au/individuals/co...tent/18843.htm