How ProjectFi calculates your FIRE projections
ProjectFi uses real Australian financial rules and market-based assumptions to project your path to financial independence. Here's what's under the hood.
Tax Engine
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ATO FY2025-26 resident income tax brackets, applied marginally
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Medicare Levy at 2%, with low-income phase-in thresholds
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Medicare Levy Surcharge across four income tiers ($101k / $118k / $158k+ for singles)
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Low Income Tax Offset (LITO)
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Seniors and Pensioners Tax Offset (SAPTO), which raises Medicare Levy phase-in thresholds for eligible over-60s
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HECS/HELP on the FY2025-26 marginal repayment system: nil up to $67k, 15% on $67k to $125k, 17% on $125k to $179.3k, 10% above $179.3k
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Franking credits on Australian dividends, with 30% gross-up and refundable offsets where applicable
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Negative gearing: rental losses offset salary and wages in the same year, with excess carried forward
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Reportable Employer Super Contributions added back when computing MLS and HECS income-test bases
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Per-person tax calculation for couple households (non-super income taxed separately, not pooled)
Source: Australian Taxation Office
Superannuation
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Super Guarantee at 12%, capped at the Maximum Super Contribution Base ($250k annual income)
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Concessional contributions cap: $30,000/year, with 5-year carry-forward available only when Total Super Balance is under $500,000
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Non-concessional contributions cap: $120,000/year, with bring-forward eligibility (3-year, 2-year, 1-year, or zero) determined by Transfer Balance Cap bands at 30 June
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Division 293: additional 15% tax on concessional contributions when income + CCs exceed $250,000
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Division 296: additional 15% tax on super earnings attributable to balances above $3 million, enabled by default
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Super earnings tax: 15% in accumulation and TTR phase, 10% effective on long-term capital gains (assets held 12+ months), 0% in account-based pension phase
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Preservation age of 60 (current AU policy default)
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Unrestricted access from age 65
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Mandatory minimum account-based pension drawdown (4% rising to 14% with age)
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Downsizer contribution: up to $300,000 per person from age 55, once per lifetime, outside concessional and non-concessional caps
Source: Australian Taxation Office
Age Pension
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Assets test with separate thresholds for homeowner vs non-homeowner, single vs couple
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Assets test taper at $3/fortnight per $1,000 above the free area
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Income test with deeming: 1.25% on the first ~$64,000 (single), 3.25% on the balance
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Net rental income assessed at actual value in the income test, with rental losses clamped to zero
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Investment property equity included in assets test; principal place of residence excluded
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Work Bonus at $300/fortnight for eligible earned income
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Income test taper at 50c per $1 (single) or 25c per person (couple) above the free area
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Lower-of-two-tests rule (your pension is the lower amount produced by either test)
Source: Services Australia
Property
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Principal place of residence (PPOR) is exempt from CGT. Mortgage interest and payments are modelled.
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PPOR sale triggers payoff of the attached mortgage; proceeds flow into non-super at a zero cost basis.
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Six-year absence rule (Div 118-145): PPOR retains its exemption for up to six years of absence, with partial exemption after that.
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Investment property returns are split between rental yield and capital growth, with each modelled separately.
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Rental income is taxable in the year earned; rental losses are negatively geared against other income.
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CGT applies on sale with the 50% discount for assets held 12 months or more.
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Investment property equity is assessable under the Age Pension assets test; net rental income is assessable in the income test.
Investment Returns & Inflation
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Default 7% nominal return (long-term Australian equity averages)
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Default 3% inflation (within the RBA target band)
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Both are user-configurable via dashboard sliders
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Real return = nominal return minus inflation
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Non-super returns are split 30/70 between income yield and capital growth by default. The income portion is taxed annually at the marginal rate; the growth portion accumulates in cost basis and is taxed on sale with the 50% CGT discount where eligible.
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Property returns, mortgage rates, and vacancy rates have their own assumption parameters, each modelled stochastically in Monte Carlo.
Monte Carlo Simulation
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5,000 independent trials per run (10,000 for the persona case studies)
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Randomised annual returns using a normal distribution (Box-Muller transform)
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Historical Australian equity volatility as the default standard deviation
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Outcomes categorised: Early / On-Target / Late / Never
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Deterministic PRNG (mulberry32) seeded per run, so results are reproducible
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Runs off the main thread via Web Worker to keep the UI responsive
Drawdown Strategy
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Safe Withdrawal Rate (SWR) floor approach with a user-configurable rate
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Default 4% SWR (based on the Trinity Study)
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Super drawn first after preservation age, with minimum account-based pension rates enforced as a floor
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Non-super investments bridge the gap from retirement to super access
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Non-super drawdowns trigger CGT calculations against the tracked cost basis, with per-person basis for couples
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Age Pension supplements income from age 67 where eligible
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Drawdown order and source choices are fully user-controlled via strategy fields
Couples modelling
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Each partner has their own super balance, preservation age, and drawdown path
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Non-super income is taxed per person (not pooled) to reflect separate marginal rates
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Non-concessional contributions can be routed to either partner
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Downsizer contributions apply per person, each subject to the $300,000 cap
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Age Pension assessment uses couple thresholds and per-person Work Bonus where applicable
Strategy framework
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ProjectFi models the choices you make. The engine never picks a strategy on your behalf.
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Strategy choices live in three life-stage buckets: Accumulation (working years), Transition (FIRE to preservation age), and Drawdown (retirement).
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Each strategy field maps to a single decision the engine has to make, e.g. where surplus cashflow goes during accumulation, or which pot to draw from first during retirement.
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Savings allocation profile: choose between manual contribution control or one of three automated patterns — bridge-aware split (target the bridge fund first, then route the rest into super), front-load super (max concessional contributions until a switch age, then pivot to non-super), or late pivot to non-super (run today's plan up to a pivot age, then full surplus to non-super).
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NEUTRAL defaults are explicitly labelled in the UI as "preview assumes [X] until you choose [field]". Once you pick, the engine honours every fully-live strategy. A small number of options are still "intent only" or "partially live"; the dashboard chips and the per-strategy guides flag those explicitly so you know what the chart is actually doing.
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Per-strategy guides explain what each choice does, when someone might apply it, and the honest trade-offs.
Source: Strategy guide
Budget 2026 proposed rules
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NOT YET LEGISLATED. The Treasury Laws Amendment Act for the 12 May 2026 Budget measures has not been registered as of 13 May 2026. ProjectFi models the most plausible interpretation based on the announcement plus the pre-1999 CGT indexation method that the new regime appears to restore.
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CGT 50% discount replaced. Disposals after 1 July 2027 use an indexed cost base (cost basis grown by CPI over the holding period) plus a 30% minimum tax floor on the indexed real gain. Age Pension recipients are exempt from the floor. Disposals before 1 July 2027 keep the 50% discount; parcels held across that date are split time pro-rata (days pre-commencement under old rules, days post under new).
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Negative gearing wound back. Investment properties purchased on or after 12 May 2026 that are classified as established homes have rental losses ring-fenced to property income — they cannot offset wages. Carried forward to future property income. Grandfathered IPs (pre-12-May) and new builds keep full deductibility.
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$250 Working Australians Tax Offset from FY27-28 onward. Wage and salary earners only. Refundable.
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$1,000 instant work-expense deduction from FY26-27 onward. Available to employed taxpayers without itemising.
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NOT MODELLED YET in ProjectFi: 30% discretionary trust tax (we do not track trust distributions); over-65 private health insurance rebate cut (we do not track PHI premiums).
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Approximations used. The non-super pool model assumes a 12-year proxy holding period for the indexation step because the pool carries no per-parcel age (real markets typically have a mix; the average user is close). On sale events the time pro-rata for cross-commencement parcels uses days; the pensioner-exemption check on sale events approximates by Age Pension age (currentAge ≥ 67 for users born 1957+ or ≥ 65 otherwise) rather than the exact assets/income test outcome.
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Toggle is off by default for every user. Flip it on via the dashboard banner. Scenarios can override the toggle for side-by-side comparison.
Source: budget.gov.au tax-reform summary + ABC News coverage 12 May 2026
Important limitations
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ProjectFi is a projection tool, not a prediction. Actual outcomes will vary.
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Future tax rules, super caps, and pension thresholds may change
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For couple households, Medicare Levy Surcharge uses the ATO family thresholds but does not currently model the extra threshold uplift for the second and later dependent children
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Investment returns are not guaranteed and past performance does not predict future results
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The tool does not model all possible financial situations (e.g. Centrelink interactions beyond Age Pension)
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ProjectFi is a calculator that models the choices you make. It is not financial advice. Projections are estimates only. Please consult a licensed financial adviser before making investment decisions.
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