Home – New Forums Money matters New solo business, Tax question. Please help

  • This topic is empty.
Viewing 10 posts - 1 through 10 (of 10 total)
  • Author
    Posts
  • #990683
    JackoUK
    Member
    • Total posts: 5
    Up
    0
    ::

    Hi there guys, hope you can help.

    I have recently moved out from the UK and starting my venture here in Australia. I am on a WHV 417 but hoping to gain sponsorship. I have started work in the construction industry and really having difficulties getting my head around the tax here.

    I have been told i need to put between 25% and 35% of my wage away each week. I currently earn $1250 p/w. What do i put away? are these figures correct.

    I have also been told that i can claim back for my tools, fuel, food, phone bill and even my car that i need for work. What can i actually claim back and how does it work? does anyone have a list as to what i can claim? Do i just keep the receipts and how does it work when i get a whopping tax bill.

    I know its quite a complex thing and thats why accountants are paid good money, but id like to get my head around it so that i am not doing anything wrong or end up with a big bill.

    Thanks i n advance guys and hope someone can help.

    Michael

    #1178173
    ThexArm
    Member
    • Total posts: 253
    Up
    0
    ::

    Hi Michael,

    Welcome to the forum.

    You haven’t told us whether you are working as an employee or a contractor.

    If you are working as an employee then your employer looks after the withholding tax part. Then at the end of the year he will give you a group certificate specifying how much wages you were paid and how much tax withheld. You can use that information to lodge your personal tax return.

    But, if you are working as a contractor on an ABN (most likely Sole trader) then you will need to set aside part of your income to pay income tax to ATO. Please see below some links you may find useful to get your head around before seeing your accountant…

    https://www.ato.gov.au/Business/Starting-and-running-your-small-business/Starting-your-business/Choosing-your-business-structure/Sole-trader/

    https://www.ato.gov.au/Business/Yearly-reports-and-returns/Income-tax-return/Sole-traders/

    #1178174
    JackoUK
    Member
    • Total posts: 5
    Up
    0
    ::

    Hi there,

    Thanks for your help. Yes i’m a sole trader on an ABN number.

    Is there a “list” of things i can set alongside my tax?

    Ill go through the links you send.

    Many thanks

    J

    #1178175
    Hatching_It
    Member
    • Total posts: 414
    Up
    0
    ::

    I would assume that as he’s on a working holiday visa that he is employed. I’m 99% sure you can’t get an ABN whilst on that visa.

    If you work for less than half of the financial year you’re not classified as an Australia resident and will pay a higher rate of tax (which your employer should be deducting from your pay)

    Sounds like you might be getting paid cash in hand though which would mean you’re not covered by workplace insurance etc so maybe you need to ask your employer about that!

    https://www.ato.gov.au/Individuals/International-tax-for-individuals/Coming-to-Australia/Working-in-Australia/When-you-start-a-job/

    #1178176
    ThexArm
    Member
    • Total posts: 253
    Up
    0
    ::

    As long as working holiday maker is carrying out business activities he/she is eligible to get an ABN.

    ATO guidance is very clear on this –

    Some employers may incorrectly treat their workers as contractors or may even encourage them to obtain an Australian business number (ABN). Having an ABN does not make you a contractor. Only people who carry on a business can apply for an ABN.
    Danger
    If an employer offers to pay you in cash without deducting any tax or paying contributions into your super account, report them to us by phoning 1800 060 062 (within Australia) between 8.00am and 6.00pm, Monday to Friday – you don’t have to give us your name.

    There are also visa conditions for WHM. They can not work with one employer for longer than 6 months. I am not sure about the complications from that side.

    #1178177
    JackoUK
    Member
    • Total posts: 5
    Up
    0
    ::
    ThexArm, post: 207466 wrote:
    As long as working holiday maker is carrying out business activities he/she is eligible to get an ABN.

    ATO guidance is very clear on this –

    There are also visa conditions for WHM. They can not work with one employer for longer than 6 months. I am not sure about the complications from that side.

    This is correct. I have an ABN number and can only work for 1 company for 6 months. Its a national company i’m working for so its certainly not cash in hand. I have been told that i will get a tax bill etc and that i need to put tax away, thats why i needed to know what can be set aside my tax. I need to buy a car for work etc so just need some help knowing what i can/cannot put away and how much i should be putting away.

    Thanks again

    J

    #1178178
    RuthH
    Member
    • Total posts: 8
    Up
    0
    ::

    Hi Jacko
    The non-resident tax rate up to $80,000 is 32.5%. So providing you put that amount aside you should be right.
    As to things that you can claim. Tools, protective clothing, sun protection, mobile phone, internet etc
    Your car it could be easier to claim the KMs you do for work rather than keep full log book for 13 weeks then keep all your receipts. The ATO give you a cents per KM method to used for business kms travelled. So keep those in a diary/spreadsheet.
    Hope this helps
    Cheers
    Ruth

    #1178179
    JackoUK
    Member
    • Total posts: 5
    Up
    0
    ::

    Wow 32.5% is high income tax. Can you claim your lunch at work against this? Also i bought a car for $1500, i’m presuming this can also go into it? I have just been keeping the receipts for all the fuel i have put in so far for work.

    Thanks for the help.

    J

    #1178180
    TehCamel
    Member
    • Total posts: 873
    Up
    0
    ::
    JackoUK, post: 207546 wrote:
    Wow 32.5% is high income tax. Can you claim your lunch at work against this?
    No, you can’t claim lunch

    Quote:
    Also i bought a car for $1500, i’m presuming this can also go into it? I have just been keeping the receipts for all the fuel i have put in so far for work.

    Yes, you can claim it, just depends on how you claim it..

    Also, if you expect you’ll earn over 75,000 in any 12 month period, you need to register for GST which is another tax. Each quarter, you have to submit a Business Activity Statement which sets out how much you’ve made, what expenses you’ve had etc, then they calculate a GST tax on that (in addition to and and separate to the 32.5% personal tax above.)

    #1178181
    JackoUK
    Member
    • Total posts: 5
    Up
    0
    ::
    TehCamel, post: 207549 wrote:
    No, you can’t claim lunch

    Yes, you can claim it, just depends on how you claim it..

    Also, if you expect you’ll earn over 75,000 in any 12 month period, you need to register for GST which is another tax. Each quarter, you have to submit a Business Activity Statement which sets out how much you’ve made, what expenses you’ve had etc, then they calculate a GST tax on that (in addition to and and separate to the 32.5% personal tax above.)

    I think i’m just going to have to keep the receipts for everything i get and give them all to an accountant. As for the GST, i’m only eligible to work 6 months for this 1 company so i wont hit that amount of money.

    Thanks for the advice.

    J

Viewing 10 posts - 1 through 10 (of 10 total)
  • You must be logged in to reply to this topic.