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November 9, 2010 at 10:15 am #970666Baby SunshineMember
- Total posts: 3
Hello forum people !
I have now registered my company. I have not got as far as registering for ABN, PAYG or GST. Because I’m not sure if I should register for GST or PAYG yet at this stage.
Is there an accountant willing to share some words of wisdom?
I think I’ll the the director and sole operator of the business and company for a while. What would be the best way to pay myself?
Thank you so much in advance.
Lots of love,
BaBy SuNsHiNe !November 9, 2010 at 1:06 pm #1045457e-SSENTMember
- Total posts: 46
If you aren’t hiring employees and are predicting you will earn less than $75,000 in your first year, I too would start with just the ABN at this stage.
As a sole trader, all the net profit (ie, all the profit made after the cost of business and tax is taken out) is income; just like if you’re employed in a ‘regular’ job. The ATO includes it all as ‘earnings’ in your yearly tax return with the COGS (cost of goods sold) used as deductions. Divide your profits into reinvestment back into your business and leave a small amount as drawings to you. Remember that it’s advisable to keep as much money as possible in your business to begin with to keep it stable and take drawings as it grows.
I would recommend giving the Business section of the ATO a call or doing a small business management course of some description (I’ve done a good one at TAFE). I’ve always found the ATO to be very helpful and knowledgeable. They’d prefer to help someone before the business gets going, rather than sorting out a mess after because the person hasn’t had the right knowledge.
The other thing you can use is companies like mine that assist in setting up your business and your books so you get started with the right set-up straight away. I can advise from bank accounts to what style of bookkeeping would best suit your business. Please visit my website if you’re interested: http://www.essent.com.au.
All the best with your new business.November 11, 2010 at 1:35 pm #1045458GetYerOwnBinMember
- Total posts: 58
I have now registered my company. I have not got as far as registering for ABN
Do you mean business or company? They’re two very different things.
As a company director you can only register for an ACN.
Further, as a company director you cannot be a sole trader.
I would sincerely recommend you educate yourself on the obligations of a company director before going any further. There are stiff penalties for non compliance and the ATO don’t take any prisoners.November 11, 2010 at 7:26 pm #1045459MattRMember
- Total posts: 196
As noted above, could you clarify if you have either registered a Business Name (as a Sole Trader) or Incorporated a Company.
If its the former, then paying yourself is no biggy. All profits/(losses) are yours, regardless of what you pay yourself, so from a tax perspective its quite simple. Just be careful of the “10%” rule for super concessional deductibility.
If you established a coy, then seek out an accountant as there are just too many variables;
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