Top up your Cobudget Account - Variable Contributions

To top up your individual Cobudget Account, you can make a one-off payment here. This is the process for collaborative spending with Enspiral. There is a different place to go to pay your Enspiral contribution.

Tax Implications of cobudget funds / variable Contributions.

In April 2016 we received advice from Deloitte.

From an IRD point of view the contributions are a gift and won’t be taxable or have GST charged on them. They are not tax deductible for the giving party and need to be paid with post tax money.

The gifts are not classed as income for the foundation - they go straight onto the balance sheet and no tax is paid on them.

Gifts from Individuals

Gifts from individuals are made using post tax money and are not tax deductible.

Gifts from Businesses

Gifts from business are not tax deductible, unlike yearly contributor fees or monthly venture fees.

Because business gifts are paid with pre-tax funds, the business will need to keep 28% aside for the future tax bill.

For the initial release of the Variable Contribution process, the gift amount entered by businesses is treated as the post-tax amount after 28% has been set aside for tax.

For example, if a business enters $100 into the Variable Contribution Form it will keep an additional $38.89 (28%) set aside for tax.

Business Tax Component Calculation

Businesses gifting funds to Enspiral Foundation are responsible for setting aside and managing tax on donations. Businesses can calculate the tax to keep aside using this formula:

($x / (1-.28))-$x

$100 gift example:

  • ($100/.72)-$100 = $38.89.
  • Foundation receives $100.
  • Business keeps $38.89 aside for tax.

$350 gift example:

  • ($350/.72)-$350 = $136.11 tax.
  • Foundation receives $350.
  • Business keeps $136.11 aside for tax.

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