Hi folks,

Today I've been offered a 9 month contract role by my last employer in the UK, this time working from Sydney. The role involves a daily rate and they told me that I will need to invoice them for the work I've done - i.e. they won't put me on their payroll. They also told me they believe I will need an ABN.

I've never contracted before and spoke to a company who help arrange ABN's. They told me that if I only work for the one company for 9 months, I can't be granted an ABN. However they say that if I intend to provide services to multiple companies, I could potentially get an ABN.

Is anyone here in a similar position - i.e. IT contracting - and not on the payroll of a company, and what are your experiences in setting up an ABN? I had a look at the website where you can register for an ABN but didn't manage to complete the setup as unsure of which answers to choose!

Thanks,
Stewart

Just setup a personal ABN in your name online as a sole trader. It's quick and you'll get a letter with the ABN number in a few days. ATO will be notified and issue you with a Tax File number unless you have one already.

You can always change things later. You can then also do other work for other companies with your ABN. It's free too!

Getting an ABN has nothing to do with who you work for. basically you will need an ABN if you are going to invoice your employer for your work plus GST and then pay the GST to the ATO. You can register as a Sole Trader rather than a company. You certainly don't need an agent to apply for one.

The problem may come if the ATO does an audit and discovers that you (and your employer) have breached the 80:20 rule i.e. more than 80% of your income has come from one source. In this case the ATO deems you to be an employee for which the employer should be paying payroll tax, compulsory superannuation, etc. Usually more of a problem for the employer than the employee. If you are not working for the same employer for more than 80% of any one tax year you probably won't get noticed.

If you work as a contractor make sure your hourly rate covers holiday pay, superannuation, etc.

Thanks for your help guys, I've now registered successfully for an ABN as a sole trader. Meeting a tax accountant next week to mak sure I do what's needed.

Good luck with your venture.

Thanks

No worries. Sent you some good luck Karma.

Would you be able to let me know how much you will be paying the accountant? Is it necessary to go to accountant to setup sole trader in Australia, especially Melbourne?

Just wondering if someone can help me as well. I'm running my own software business and sell the right to use my software online worldwide.

If i have a customer from Australia, do i have to collect GST from them? As i will be sole trader in Melbourne within 2 weeks time

Thanks for any helps.