This is part five in a series of posts about how we're growing as a company. In this post I'll talk about our laptop program, which lets new team members pick the hardware that works best for them. Rather than just describe the policy, I thought I'd just post the policy as-is.
- Developer career paths
- How we work
- Compensation and career progression
- Interview process
- Laptop program
- Anti-harassment policy
- Local or remote?
Great knowledge workers need great tools. Since we vary between working from home and working from an office, it's important to be able to have a computer that is portable and can be taken with you.
It's all too common to meet professionals who invest in great technology at home, but are forced to work with sluggish machines at work. Rather than have the company buy a fleet of laptops to give to people, I wanted to find a way to balance three goals:
- You should be able to pick the laptop/device that works best for you
- You should own it, not the company
- You shouldn't be out of pocket - the company should pay for it
Picking your laptop
You are a professional, and you are smart, and we trust you. You're intrinsically motivated to do great work because you take pride and derive great satisfaction in what you do, and you know the hardware that fits the way you work best. Perhaps you love the sleek look of a Macbook Pro. Maybe you prefer a touch screen. We trust you to pick the right hardware for you, because we know you'll pick whatever enables you to do your best work.
That said, we do have a few requirements/limits:
- Maximum budget: AUD$4400 not including GST
- It needs to be fast and powerful enough to do the work you need to do (compiling code, etc.).
- You need a warranty that will cover the laptop and any repairs it may need for at least two years (this needs to be included in the price)
- It needs to be new, not second-hand
We prefer to buy directly from the manufacturer (Apple, Lenovo, etc.) so we'd suggest shopping at their online stores rather than going to the local computer store. Once you've configured the system to your exact needs, send a quote to me and Octopus will purchase it and arrange for it to be delivered to you.
How it works
Any individual can salary sacrifice a laptop by working with their employer - the idea is that the employer purchases the laptop on your behalf, taking it out of your pre-tax salary. It's then yours to own. But the downside is that since it comes out of your salary, you're out of pocket.
To avoid being out of pocket, our program works like this:
- We increase your salary by
CostOfLaptop / 2. I.e., for a $4,400 laptop, that's $2,200 per year
- You choose the laptop you want, we purchase it on the Octopus Mastercard, and ship it to your address
- We treat it like a salary sacrifice, by deducting
CostOfLaptop / 24from each month's pay. Two years later it is repaid.
The end result is that you end up with a new laptop, but it never comes out of your agreed salary, because we increase your salary and then salary sacrifice it back. Octopus has paid for it, but you own it.
Tax and other issues
When we purchase the laptop, the GST is claimed by Octopus. The total value that you salary sacrifice (and that we increase your salary by) is the after-GST portion. The salary sacrifice portion is pre-tax.
The ATO allow individuals to salary sacrifice one laptop and/or phone per year, as long as its used for your employment (even if you also play World of Warcraft on it at nights). This article has more details on what can and can't be salary sacrificed. Note that this means that if you already salary sacrificed a laptop under your previous employer, you might not be able to participate in this program until the next tax year (you should talk to your accountant).
It goes without saying, but as with all tax related issues, you should talk to your accountant about any of this before proceeding.
Note that when it comes to depreciation, some accountants will give different advice. Some may say it's fine to claim depreciation in your tax return since you own the laptop; others may say that the ATO doesn't allow it and that it's double dipping (since you already got the laptop tax-free since the sacrificed amount is pre-tax). Whether you claim depreciation is totally a matter for you and your accountant to figure out (smile)
You can replace the laptop every two years - effectively the laptop will have been "paid off" in that time, so you're free to either keep using it, or get a new one under the program.
The laptop belongs to you, so if it's stolen, defenestrated, or falls down a well, it's your responsibility to find a replacement. It's a good idea to call your home and contents insurance provider to ensure the laptop is covered.
If you happen to leave (we hope you never leave!) before the two years have passed since purchasing the laptop, the remaining balance from the salary sacrifice will be deducted from the final pay slip. If the laptop is relatively new and in good condition, at our discretion we may agree to take the laptop in lieu of the final balance.
To help put this into concrete terms, here's an example:
- Roger joins in January and uses the program to order a laptop, with an after-GST value of $4400 on 1st January
- His yearly salary increases by $2,200 ($183.33 per month)
- The laptop is purchased on his behalf by the company, and is delivered to his address in time for him to start
- $183.33 is salary sacrificed from his wage each month, to repay the laptop. His pay slip looks like this:
Salary $X + 183.33
Deduct laptop salary sacrifice: $183.33
Gross pay: $X
- Roger leaves to start his own business; his last day is 1 July
- In the 6 pay runs between his start and end date, $183.33 x 6 has been paid back ($1099.98)
- In his final pay run, the final balance of $3300.02 is deducted from the final payout figure
- Roger keeps the laptop
Additional hardware budget
Our laptop program covers the purchase of the laptop, and any software, warranties or other items that you buy at the same time from the laptop vendor. However, you might need other items, either to help work from home or from the office. Examples are headsets, cameras, keyboards, and so on.
Everyone has a budget of $400 per financial year, per person, to spend on these items. You can either buy them yourself and then send an expense claim to us for reimbursement, or we can buy them for you.
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