Maximising Your Job Promotion Or Salary Increase: Financial Advice For High Income Earners

Congratulations on your job promotion or salary increase!

A job promotion, salary increase, or new high-paying role is a significant achievement—congratulations! While extra income is exciting, it also brings new financial responsibilities. For high-income earners, making informed decisions about your money is crucial to building lasting wealth. 

Here, we explore why financial advice for high-income earners matters and how strategic planning can help you make the most of your increased income.

The financial challenges for high-income earners

Many high-income earners believe a salary increase or job promotion automatically leads to financial security, but that’s not always the case. Rising expenses—like larger homes, luxury cars, or frequent holidays—can quickly consume extra income. 

As the saying goes: 

“It’s not what you earn, but what you keep.” 

Without a clear plan, high-income earners risk falling into lifestyle inflation, where spending grows faster than income, leaving little for long-term goals like retirement or investments.

The tax burden for high-income earners

Australia’s progressive tax system significantly impacts high-income earners. If your income exceeds $190,000 in 2025, 47% of each additional dollar (including the Medicare Levy Surcharge) goes to the tax office. 

This means nearly half of your salary increase could disappear before it reaches your bank account. 

Tax advice for high-income earners is essential to understanding and managing this burden, helping you retain more of your earnings through strategic planning.

High-income earner tax strategies 

For high-income earners, a job promotion or salary increase is an opportunity to build wealth, but it requires careful planning. 

Below are high income earner tax strategies that, when guided by a professional financial planner, can reduce your tax liability and enhance your financial future. Each strategy has benefits and risks, so understanding them is key.

Salary Packaging

Redirect your income into benefits like novated car leases or additional superannuation contributions to lower taxable income. 

• Example: Packaging a $10,000 car lease could save thousands in taxes annually.
• Consideration: Not all employers offer extensive packaging, and it reduces take-home pay.

Concessional Super Contributions

You can contribute up to $30,000 annually (2025 cap) pre-tax to super, taxed at 15% instead of your marginal rate (up to 47%). 

• Example: A $20,000 contribution could save up to $6,400 in taxes for top earners.
• Consideration: Funds are inaccessible until retirement, and caps must be monitored.

You can learn more about concessional contributions (and find out how it can be a major benefit) here.

Investment Structures

Use trusts or family companies to distribute income to family members in lower tax brackets. 

• Example: Distributing $50,000 to a spouse with no income could save $15,000-$20,000 in taxes.
• Consideration: Set-up costs ($5,000-$10,000) and ongoing compliance require careful planning.

Negative Gearing

Claim losses from investment properties (e.g. mortgage interest) to offset taxable income. 

• Example: A $15,000 annual loss could reduce your tax bill by $7,050 at the top rate.
• Risk: Property values may stagnate, and rising interest rates can increase costs.

Capital Gains Strategy

Hold assets for at least 12 months to qualify for the 50% Capital Gains Tax (CGT) discount. 

• Example: Selling shares worth $100,000 in gains could save $23,500 in taxes with the discount.
• Risk: Market timing is unpredictable, and selling too early eliminates the benefit.

NOTE: These high-income earner tax strategies aren’t DIY—they require expertise to avoid costly mistakes. Our licensed advisers at Elliot Watson Financial Planning ensure every move aligns with your goals, from tax savings to long-term wealth.

A cautionary tale

Image: Pexels

It’s New Year’s Eve, and I’m standing with my mate, a glass of bubbly in hand, watching fireworks explode across the night sky. He’s buzzing — grinning like he’s already won the lottery. 

“I can’t wait for this year,” he tells me. 

“Big promotion, massive pay rise — new house, family holiday, maybe even pay off some debt. It’s going to change everything.” 

We toast under the booming sky, full of hope, fireworks, and champagne.

Fast forward twelve months. Same spot. Same fireworks. Same slightly warm champagne. I spot him across the crowd. 

“Oi! Tell me everything! How did it all go?” I ask. 

He blinks. “How did what go?” 

I laugh. “Last year — the promotion, the pay rise, the plans?” 

He scratches his head, sheepish.”Ohhh yeah, that. It all happened… but honestly, I have no idea where the money went. I’m exactly where I was. Thought there’d be some left over, but… nah.” 

We stand there, fireworks booming overhead — bright, loud, and gone in a flash.

It turns out that earning more doesn’t change your life unless you change what you do with it.

What happened?

Despite the big income jump, the outcome was the same — no savings, real progress, or dreams achieved. It’s a common trap, perfectly captured by the old Swedish proverb: 

“He who buys what he does not need, steals from himself.”

Without a clear plan or disciplined strategy, the extra money simply disappeared — a few upgrades here, a shinier car there, bigger nights out everywhere. Lifestyle inflation crept in quietly, undoing the financial gain.

There was no adviser, financial roadmap, or structure to guide decisions. Poor habits, impulse spending, and a lack of education turned a life-changing pay rise into little more than a forgotten opportunity.

Why more income means bigger risks

A salary increase doesn’t guarantee wealth. Studies show 70% of lottery winners go broke within years, and 90% of inheritances disappear by the third generation. For high income earners, the stakes are higher—more income amplifies the impact of poor financial decisions.

Without the right strategy and mindset, extra income can become a liability rather than a blessing. It’s like pouring petrol on a fire—without structure, guidance, and a clear plan, even the biggest paydays can vanish, leaving behind only regret and a few forgotten receipts.

Steps to maximise your income

Image: Pexels

A job promotion or salary increase is a chance to build wealth, but it starts with informed choices. Here are practical steps high-income earners can take, ideally with professional guidance:

1. Save Strategically: Aim to save 10-20% of your income, adjusting for debts or goals. For example, saving 10% of a $150,000 salary ($15,000/year) can fund significant investments over time.
2. Invest for Growth: Build a diversified portfolio with assets like ETFs or managed funds. Even $200/month invested consistently can grow substantially over decades.
3. Automate Savings: Set up automatic transfers to savings or investment accounts to prioritise wealth-building before spending.
4. Seek Professional Advice: A financial planner can create a personalised plan, incorporating high income earner tax strategies to optimise your wealth. They’ll help you navigate complex decisions, from tax planning to investment choices, with expertise tailored to high earners.

Professional advice is particularly valuable for high-income earners because it addresses unique challenges, like high tax rates and complex investment options. A planner can also provide accountability, helping you stay focused on long-term goals rather than short-term spending.

The value of planning ahead

Your job promotion or salary increase is more than a reward—it’s an opportunity to shape your financial future. By understanding the tax and financial challenges high-income earners face, you can make informed decisions to maximise your income. 

Engaging a professional financial planner can provide clarity and confidence, ensuring your salary increase builds wealth, not just expenses.

For high-income earners ready to take the next step, contact the team at Elliot Watson Financial Planning to explore tailored strategies. A professional can help you turn your job promotion or salary increase into a lasting legacy.

Disclaimer

The information within, including tax, does not consider your personal circumstances and is general advice only. It has been prepared without taking into account any of your individual objectives, financial solutions or needs. Before acting on this information, you should consider its appropriateness regarding your objectives, financial situation and needs. You should read the relevant Product Disclosure Statements and seek personal advice from a qualified financial adviser.

The views expressed in this publication are solely those of the author; they are not reflective or indicative of the licensee’s position and are not to be attributed to the licensee. They cannot be reproduced in any form without the author’s express written consent.

Elliot Watson Financial Planning Pty Ltd and its advisers are Authorised Representatives of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.