How to Build a Salary Sacrifice Calculator

interface SalaryInputs {
  grossSalary: number;
  country: "AU" | "UK";
  sacrificeItems: SacrificeItem[];
  employerSuperRate?: number; // AU: default 11.5% (2024-25)
  }

  interface SacrificeItem {
  name: string;
  type: "super" | "car_lease" | "laptop" | "other";
  annualAmount: number;
  }

  // Australian tax brackets 2024-25
  const AU_TAX_BRACKETS = [
  { min: 0, max: 18200, rate: 0 },
  { min: 18201, max: 45000, rate: 0.16 },
  { min: 45001, max: 135000, rate: 0.30 },
  { min: 135001, max: 190000, rate: 0.37 },
  { min: 190001, max: Infinity, rate: 0.45 },
  ];

  const MEDICARE_LEVY = 0.02;
  const SUPER_TAX_RATE = 0.15; // concessional contributions taxed at 15%
  const CONCESSIONAL_SUPER_CAP = 30000; // 2024-25

  function calculateAUTax(taxableIncome: number): number {
  let tax = 0;
  for (const bracket of AU_TAX_BRACKETS) {
    if (taxableIncome <= bracket.min) break;
    const taxableInBracket = Math.min(taxableIncome, bracket.max) - bracket.min;
    tax += Math.max(0, taxableInBracket) * bracket.rate;
  }
  return tax;
  }

  function compareSalarySacrifice(inputs: SalaryInputs) {
  const totalSacrifice = inputs.sacrificeItems.reduce((sum, i) => sum + i.annualAmount, 0);
  const superSacrifice = inputs.sacrificeItems
    .filter(i => i.type === "super")
    .reduce((sum, i) => sum + i.annualAmount, 0);

  // Without sacrifice
  const taxWithout = calculateAUTax(inputs.grossSalary);
  const medicareWithout = inputs.grossSalary * MEDICARE_LEVY;
  const netWithout = inputs.grossSalary - taxWithout - medicareWithout;

  // With sacrifice (reduce taxable income)
  const reducedGross = inputs.grossSalary - totalSacrifice;
  const taxWith = calculateAUTax(reducedGross);
  const medicareWith = reducedGross * MEDICARE_LEVY;
  const netWith = reducedGross - taxWith - medicareWith;

  // Super sacrifice is taxed at 15% inside the fund
  const superTaxInFund = superSacrifice * SUPER_TAX_RATE;

  // Net benefit: tax saved minus super fund tax on super sacrifice
  const incomeTaxSaved = (taxWithout + medicareWithout) - (taxWith + medicareWith);
  const netBenefit = incomeTaxSaved - superTaxInFund;

  // What you'd pay for the same benefits from post-tax income
  const marginalRate = getMarginalRate(inputs.grossSalary);
  const postTaxCostEquivalent = totalSacrifice / (1 - marginalRate);

  return {
    withoutSacrifice: { gross: inputs.grossSalary, tax: taxWithout, medicare: medicareWithout, net: netWithout },
    withSacrifice: { gross: reducedGross, tax: taxWith, medicare: medicareWith, net: netWith },
    sacrificeTotal: totalSacrifice,
    taxSaved: incomeTaxSaved,
    superTaxInFund,
    netAnnualBenefit: netBenefit,
    netMonthlyBenefit: netBenefit / 12,
    effectiveDiscount: ((incomeTaxSaved / totalSacrifice) * 100).toFixed(1) + "%",
  },
  }

  function getMarginalRate(income: number): number {
  for (let i = AU_TAX_BRACKETS.length - 1; i >= 0; i--) {
    if (income > AU_TAX_BRACKETS[i].min) return AU_TAX_BRACKETS[i].rate + MEDICARE_LEVY;
  }
  return 0;
  }