How does the Income Protection Insurance Tax Deduction work?

 
Income Protection premiums are fully tax deductible to individuals. When you complete your tax return, you can claim your income protection premiums as a work deduction.

How much you will save will depend on your marginal tax rate

Let's look at an example:

If you earn over $180,000 pa your marginal tax rate is 45%. If your income protection policy costs $1,000 you would...
Pay the insurer	$	1,000
Receive a tax refund of	- $	450
Receive 20% back from Insurance Watch	- $	200
NET COST of Income Protection in first year ( a saving of 65%)	$	350

For incomes between $80,000 and $180,000 the marginal tax rate is 37% and the net cost would be $430 - a saving of 57%.

For incomes between $37,000 and $80,000 the marginal tax rate is 30% and the net cost would be $500 - a saving of 50%.

These tax savings along with Insurance Watch's 20% refund offer make income protection very affordable. Run your own quotes now.

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Note: you should seek advice from a tax professional on your own situation.