Passive Income in Australia: Perk TV update

Due to a change in Perk TV’s payment rates, it may now actually be a viable passive income source for Australians. This post repeats the previous analysis undertaken here, using the new parameters.   

Recently, a commenter on my previous analysis of Perk TV let me know that the payment rates had changed. Previously, watching two videos in the US would net you four points. In Canada, four videos would give you four points. But for the rest of us chumps worldwide, we had to watch 20 videos for four points. This was a huge source of disadvantage and was one of the key reasons it was not viable for Australians. Now however, that’s all changed.

According to Perk Support, the new rates are:

• For US: Earn up to 3 points for each video

• For UK, Canada and Australia: Earn up to 1 point for each video

• For IN: Earn up to 1 point for each video

 Source 

This is quite a drastic change in rates for Australians - instead of 5 videos to get a point, we can now watch just one. Though I’m a little skeptical of the ‘up to’ part of those sentences. In any case, let’s get into the analysis.

Analysis

Unfortunately, unless you sign up you can no longer see the points required to redeem for each reward. In this case, I’m going to assume that my previous assumption still holds. That is, that you would prefer to convert into cash rather than a gift card, and that the Paypal $25 gift card is still the best value for 35,000 points (if anyone can correct me on this, it would be much appreciated). Though I have read about other users who redeem for gift cards and then exchange them with other people for cash options, I will ignore this in my analysis as it seems quite variable what value you might exchange them for. Additionally, if the idea is for passive income, then spending time trying to exchange for something else is also an opportunity cost on your time. Again, we’ll ignore these and stick with a simple ‘earn points, get gift card’ paradigm.

This means the exchange rate to a $25 PayPal gift card is 1400 Perk points = $1 (35000 / 25). Assuming that the average video is about 2 minutes long, and under the new payment rates, that we are rewarded with 1 point per video - we could expect to earn 720 points per phone per day (1440 min/day / 2; also assumes that these videos are running continuously). This works out at a theoretical maximum return, under these parameters, of 51.4 cents per phone per day ( 720 points/day / 1400 points/dollar).

Unfortunately, that’s not the whole story as there are at least some costs which would eat into your return - namely the cost of your data and power, and tax implications. There could be others as well, for example if you were to purchase a phone for this specific use, but we’ll ignore this as this is more an individual circumstance thing.

I’m going to assume that the user has a properly unlimited data plan. I say “properly unlimited”, because there are many in Australia that advertise as “unlimited” but have some clause that states you can’t use more than X GB otherwise your speed will be throttled/shaped. If you’re already paying for a properly unlimited data plan, then the additional data usage from Perk TV doesn’t impact you and can therefore be ignored. If you aren’t on a properly unlimited plan and you were going to upgrade your service, then there would obviously be an additional cost to factor in. Again, for simplicity, I’m going to ignore this one - but do your own math for your own situation.

I’m also going to assume that most of my analysis on electricity costs from last time still holds. That is, 4 US cents per phone per day, with our approximate doubling factor to account for higher energy costs in Australia (the previous post explains the rationale), and taking into account the exchange rate.  The exchange rate has moved slightly since last time, and not in our favour. Currently, the exchange rate is sitting at 1 USD = 1.36 AUD. So our daily electricity costs work out to be 12.08 cents per day (4c USD/phone/day multiplied by 2.22 - the higher electricity costs factor - multiplied by 1.36 to convert to AUD).

Finally, let’s consider tax implications. I ignored this last time, mainly because it didn’t occur to me, but also because electricity costs alone outweighed any cash benefit under the previous payment rates - so there wasn’t any use in beating a dead horse. Obviously, income tax in Australia is very dependent on your own situation - income tax rates are marginal, so the tax you would pay on these additional earnings depends on what your income already is. For simplicity’s sake, I’m going to ignore complexities like the Medicare levy and other tax offsets that you may or may not be entitled to.

According to the Australian Bureau of Statistics, in November 2016 the average weekly total earnings for all employees was $1,163.50 (Source). Multiplying by 52, this comes out at $60,502 in annual terms. So let’s assume that is your current income. Your earnings from Perk TV would therefore be taxed at 32.5 cents per dollar (Source). Again, do your own sums for your personal situation.

Looking at the breakdown, we have (theoretically, remember) 51.4 cents earned per day, less 12.08 cents in electricity, less 16.705 cents in tax ( 51.4 cents * 0.325 cents in the dollar). This comes to 22.615 cents per day in net income. 

In summary, Perk TV is a net positive passive income stream for Australians providing the following assumptions hold:

• Australians are paid 1 point per video
• 35,000 points are exchanged for a $25 PayPal gift card, which represents the best value for very minimal effort (happy to be corrected if this reward is no longer current)
• You have a properly unlimited data plan and can thus ignore the additional costs of usage
• Electricity costs are about 12 cents per day
• You are on the middle marginal income tax bracket of 32.5 cents in the dollar

Obviously, your milage may vary depending on your own circumstances - so do your own math. 

Your thoughts?

Is there anything I missed in my analysis? Do you think it is worthwhile from your experience? Have you done your own - how does it work out for you? What parameters make your results better/worse? Love to hear from any other Aussies having a go at this one.