Home Forums Starting your journey Tax advice for employee taking on after hours work

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  • #1000570
    Plasterer92
    Member
    • Total posts: 1

    Hi there,

    I am a full time employee of a plastering company and my tax is withheld by my employer each week.

    If I was to do a plastering job of my own on the weekend using an ABN as a sole trader, will the amount I earn be added to the amount I have earned as an employee and any tax owing will come out of my tax refund and/or a bill come tax time?

    Also if I have completed a job and charged the client $2000 in total and spent $500 in materials. Will I pay have to pay tax on the total $2000 or just the $1500 which is the money I have made from the job (labour)?.

    Any advice on how things work will be appreciated as looking after my own tax affairs and knowing how much to charge for my services is new to me.

    #1224819
    Dave – FS Concierge
    Moderator
    • Total posts: 2,522

    Hi [USER=120830]@Plasterer92[/USER],

    Welcome to the forums!

    In general yes your 2nd income will be added to your 1st income for tax purposes. Since you will be taxed on your 2nd income, you should plan to put aside a portion of it to cover the tax bill at tax time.

    You will pay tax on the profits only ($1500 not $2000). You will declare your $2000 income and your $500 expenses.

    At the following link you can find the current tax rates, so you’ll know how much to put aside for tax: https://www.ato.gov.au/Rates/Individual-income-tax-rates/

    Hopefully an accountant will drop by to fill in any gaps, or correct me if I’m wrong.

    Dave

    #1224820
    Chris-K
    Participant
    • Total posts: 11

    Hi [USER=120830]@Plasterer92[/USER]

    Dave is correct both incomes are added together and you pay tax on it after what’s left after subtracting your expenses .

    A few things to note

    1. Check with your plastering job if your Tax file nomination form answered the question that you only have one job. This is important because the first $18,200 of your income is tax feee.

    2. You will pay tax on your second job so you need to know how much this is going to be. This may also impact how much fees you will charge. You may be better off charging less if it means paying less tax. The tax rates will help in this .

    Best to chat to an accountant on this so you know in advance.

    Happy to help if needed .

    #1224821
    bb1
    Participant
    • Total posts: 4,472
    Chris-K, post: 271989, member: 120751 wrote:
    Hi [USER=120830]@Plasterer92[/USER]

    You may be better off charging less if it means paying less tax. The tax rates will help in this .

    .

    Bit confused by the logic behind this, although factually correct, but it’s only the additional amount over the tax bracket that you pay the higher tax on, wouldnt it be better to pay a few dollars more, as the benefits in your pocket are still much better.

    #1224822
    Corey
    Member
    • Total posts: 568

    A valuable resource – Income from more than one job

    https://www.ato.gov.au/Individuals/Working/Working-as-an-employee/Income-from-more-than-one-job/

    Cheers
    Corey

    #1224823
    Chris-K
    Participant
    • Total posts: 11

    To clarify [USER=53375]@bb1[/USER] the point I was making is that tax on a second job can be tricky and you don’t want to have a tax debt at the end of the year on money you have already spent.

    The main thing is to plan for it and avoid those bad surprises.

    #1225456
    Matt Dell
    Participant
    • Total posts: 1

    @paul-fs-concierge
    Seems we have a spammer in our midst = @ducklife1a
    over to you Thanks

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