SEAndy

Hi,

I'm heading for Sydney in August 2007 on a Permanent Residency Visa. I'm looking at setting up as a Sole Trader. As I'm in Software development I have the opportunity to start out by working (remote) for a company in Sweden for the first 3-6 months, where I would invoice them from Australia.

I have found a lot of information on ato.gov.au, but have a couple of questions below. Thankful for any hints, links or recommendations.

1. As a Sole Trader, will I need to pay "Super" (9% is it?) of my total income?

2. Are there any insurances one should (or must) take out while working as a sole trader? What's the cost for private health insurance and income protection insurances in Australia as a sole trader?

3. Any specific rules or recommendations I should be aware about when invoicing to a foreign country, from Australia, as a Sole Trader?

Thanks in advance,
Andy, Sweden

Centurion

1. As a Sole Trader, will I need to pay "Super" (9% is it?) of my total income?

NO you dont have to.

2. Are there any insurances one should (or must) take out while working as a sole trader? What's the cost for private health insurance and income protection insurances in Australia as a sole trader?

Depends on your industry & circumstance. Bear in mind that Australia is second only to the USA in terms of civil litigation so some form of public liability and possible professional indemnity may be useful.


3. Any specific rules or recommendations I should be aware about when invoicing to a foreign country, from Australia, as a Sole Trader?

Nope not really.

The Bloke

For small business advice and contact info in NSW try,

www.smallbiz.nsw.gov.au

nzer57

When you get here go to the ATO and get your TFN (Tax File Number)

Once you have that you can get your ABN (Australian Business Number) This you can do online. Next register for GST (with the ATO) and through the NSW Business of Fair Trading register your business name. Costs about $100

Once you have all that you are good to go.

I suggest you buy a basic copy of MYOB for small business accounting purposes and connect with an accountant who can brief you on any other detail during your startup phase.

PS: Most software development and associated companies are concentrated on the North Shore around Crows Nest, Artarmon and Lane Cove.

king kong

I think the only one worth checking out is if you would have to charge GST[vat] to an overseas company .Its not an issue if you arnt registered for GST but considereing you would probably earn in excess of 50000 dollars turnover you would have to register .
In regards to insurance you will more than likely have to get Public liabilty and a small basic Workers Comp insurance ,just incase you shoulld happen to employ someone even if its only for a few hours .
Im a sole trader and i dont pay any super to my self ,i would rather speculate on the property market .

nzer57

The thing you will have to pay as a registered business is Workers Comp. The bastards make you pay a minimum of $120/yr even when you have no employees. And the thing that really sucks - workers comp isn't available to you the employer to claim against

Gibbo

Don't think this is right. 3 of my sons are self employed, one with a registered business name, and none have workers comp. Income protection is around $500-600. Workers comp starts around $4k.

nzer57

They just haven't caught up with them yet. If you're self employed technically you have to register as a business with fair trading even if it's just Joe Bloggs (Sole Trader)

Exile

If you do all your work for one client and have no employees doing principal work, I think you may fall into the personal services income trap, which means you get taxed as if you were an employee of a company, not at the corporate tax rate.

Gibbo

It is taking them a h*llova long time then! Their father never paid worker's comp either!!

Gibbo

You are right on the button there - and it only takes 1 tax return for them to do it too.

nzer57

The unusual ratio is a max of 80% for one client. You can however get exemptions if it's a contract and that's your normal business method.

You would have to show the ATO an employment contract with a termination date to get this past them.

My understanding though is that he is simply an international home based employee. He may be able to get them to vary his employment terms to say subcontractor.

nzer57

Bastards hounded me for 3 years

Gibbo

Even the subcontract line doesn't work anymore. If you contract mainly for the one firm the ATO treats you as an employee. Couldn't say what % of the year you could get away with. Moral. Always have a good accountant!!

king kong

True and depending on industry you will most definetly need worker comp basic and certainly PL .