Tax for self employed tradesmen - query
Apr 10th 2007, 6:42 pm
#1
Forum Regular
Thread Starter
Joined: Sep 2006
Location: Ellenbrook, Perth
Posts: 226
Tax for self employed tradesmen - query
Hi all
The australian government websites state that if you earn above $75,000 you pay 40% tax.
Is it like here being self employed - i.e. CIS - the contractor already takes 18% at source - and towards the year end, you fill in a tax return - and this determines whether you owe more or less to the goverment. Or do they simply deduct 40% from your wages each week.
Alternatively, do you pay nothing until the year end (in which case you need to save towards your tax each week).
Can you offset some of your wages with transport, tools etc as you do here.
Has anybody here been stung really high for tax? 40% robbing ba%%% s.
Help appreciated.....
Gordon
The australian government websites state that if you earn above $75,000 you pay 40% tax.
Is it like here being self employed - i.e. CIS - the contractor already takes 18% at source - and towards the year end, you fill in a tax return - and this determines whether you owe more or less to the goverment. Or do they simply deduct 40% from your wages each week.
Alternatively, do you pay nothing until the year end (in which case you need to save towards your tax each week).
Can you offset some of your wages with transport, tools etc as you do here.
Has anybody here been stung really high for tax? 40% robbing ba%%% s.
Help appreciated.....
Gordon
Apr 10th 2007, 9:41 pm
#2
Has left the building
Joined: Mar 2007
Posts: 4,079
Re: Tax for self employed tradesmen - query
Hi all
The australian government websites state that if you earn above $75,000 you pay 40% tax.
Is it like here being self employed - i.e. CIS - the contractor already takes 18% at source - and towards the year end, you fill in a tax return - and this determines whether you owe more or less to the goverment. Or do they simply deduct 40% from your wages each week.
Alternatively, do you pay nothing until the year end (in which case you need to save towards your tax each week).
Can you offset some of your wages with transport, tools etc as you do here.
Has anybody here been stung really high for tax? 40% robbing ba%%% s.
Help appreciated.....
Gordon
The australian government websites state that if you earn above $75,000 you pay 40% tax.
Is it like here being self employed - i.e. CIS - the contractor already takes 18% at source - and towards the year end, you fill in a tax return - and this determines whether you owe more or less to the goverment. Or do they simply deduct 40% from your wages each week.
Alternatively, do you pay nothing until the year end (in which case you need to save towards your tax each week).
Can you offset some of your wages with transport, tools etc as you do here.
Has anybody here been stung really high for tax? 40% robbing ba%%% s.
Help appreciated.....
Gordon
Gordon
All the info you need can be found on this site.
Its not fun paying 46.5% so get a good tax accountant.
Apr 10th 2007, 10:02 pm
#3
IT Guru
Joined: Mar 2007
Location: Essex at the moment!
Posts: 327
Re: Tax for self employed tradesmen - query
http://www.ato.gov.au/individuals/co...82&mfp=001/002
Gordon
All the info you need can be found on this site.
Its not fun paying 46.5% so get a good tax accountant.
Gordon
All the info you need can be found on this site.
Its not fun paying 46.5% so get a good tax accountant.
Or just stop working for the rest of the year!
At what point dose socialism stop and communism start?
Apr 11th 2007, 1:47 am
#4
Proudly Deplorable
Joined: May 2003
Location: Alloha snack bar
Posts: 24,246
Re: Tax for self employed tradesmen - query
And it looks like we are going to get a Socialist Federal government that is controlled by trade unions in October. Expect taxes to start rising again.
Last edited by Amazulu; Apr 11th 2007 at 2:31 am.
Apr 11th 2007, 3:10 am
#6
BE Forum Addict
Joined: Jun 2004
Location: Hills District
Posts: 1,399
Re: Tax for self employed tradesmen - query
[quote=gordon&laura;4623127]Hi all
The australian government websites state that if you earn above $75,000 you pay 40% tax.
Is it like here being self employed - i.e. CIS - the contractor already takes 18% at source - and towards the year end, you fill in a tax return - and this determines whether you owe more or less to the goverment. Or do they simply deduct 40% from your wages each week.
Alternatively, do you pay nothing until the year end (in which case you need to save towards your tax each week).
Gordon, you will get an Activity Statement, to fill in each quarter, from the ATO. You can claim everything pertaining to your work vehicle, tools, materials etc. at the end of the financial year. I have never know a tradie to pay 40c in the $. The main contracter is supposed to withold
a percentage but can't remember what. The tax law is very complex so subbies usually have an accountant to do their tax. It is well worth the cost!
The australian government websites state that if you earn above $75,000 you pay 40% tax.
Is it like here being self employed - i.e. CIS - the contractor already takes 18% at source - and towards the year end, you fill in a tax return - and this determines whether you owe more or less to the goverment. Or do they simply deduct 40% from your wages each week.
Alternatively, do you pay nothing until the year end (in which case you need to save towards your tax each week).
Gordon, you will get an Activity Statement, to fill in each quarter, from the ATO. You can claim everything pertaining to your work vehicle, tools, materials etc. at the end of the financial year. I have never know a tradie to pay 40c in the $. The main contracter is supposed to withold
a percentage but can't remember what. The tax law is very complex so subbies usually have an accountant to do their tax. It is well worth the cost!
Apr 11th 2007, 3:49 am
#7
Forum Regular
Joined: Nov 2005
Posts: 50
Re: Tax for self employed tradesmen - query
Hi,
Might be a bit of a mis-conception here. You don't pay 40% on the full $75,000, in fact the 40% rate doesn't kick in until you are earning over $75k, but even if you were earning $75,500 you'd be taxed at lower rates up to the $75k, then 40% on the $500.
You can earn up to $25,000 and tax rate is only 15%, then 30% on the next $50,000, then aformentioned 40% kicks in after $75,000 (in total). Higher rate still for those fortunate enough to earn over $150,000.
Just checked, and if you are earning $75,000 you'd pay tax of $17,850, which is an effective rate of 23.4%, which doesn't sound nearly so bad!
There will be medi-care levi on top of that, can't remember exactly how much but something like 1% over $50,000.
Also, as the previous poster noted, you will be able to deduct some expenses if they are genuinly work-related.
I work in an accountants firm (but try not to do too much tax), so if anybody in Sydney does need a good accountant pm me and I'll give you the details.
Might be a bit of a mis-conception here. You don't pay 40% on the full $75,000, in fact the 40% rate doesn't kick in until you are earning over $75k, but even if you were earning $75,500 you'd be taxed at lower rates up to the $75k, then 40% on the $500.
You can earn up to $25,000 and tax rate is only 15%, then 30% on the next $50,000, then aformentioned 40% kicks in after $75,000 (in total). Higher rate still for those fortunate enough to earn over $150,000.
Just checked, and if you are earning $75,000 you'd pay tax of $17,850, which is an effective rate of 23.4%, which doesn't sound nearly so bad!
There will be medi-care levi on top of that, can't remember exactly how much but something like 1% over $50,000.
Also, as the previous poster noted, you will be able to deduct some expenses if they are genuinly work-related.
I work in an accountants firm (but try not to do too much tax), so if anybody in Sydney does need a good accountant pm me and I'll give you the details.
Apr 11th 2007, 3:50 am
#8
Forum Regular
Joined: Nov 2005
Posts: 50
Re: Tax for self employed tradesmen - query
P.S. I have no idea how withholding works for contractors, but the total amount you will pay in the end is based on my post above.
Apr 11th 2007, 3:52 am
#9
Forum Regular
Joined: Nov 2005
Posts: 50
Re: Tax for self employed tradesmen - query
Medicare levy is 1.5% on total taxable income. Medicare levy surcharge payable in some cases depending on earnings, if you don't have private health cover. Another 1%.
Apr 11th 2007, 5:29 am
#10
Forum Regular
Thread Starter
Joined: Sep 2006
Location: Ellenbrook, Perth
Posts: 226
Re: Tax for self employed tradesmen - query
Your posts are really informative - that's exactly what I wanted to know. I really just wanted to make a comparison to the UK - great!!!!
Karma coming your way...
Apr 11th 2007, 10:18 pm
#12
IT Guru
Joined: Mar 2007
Location: Essex at the moment!
Posts: 327
Re: Tax for self employed tradesmen - query
Hi,
Might be a bit of a mis-conception here. You don't pay 40% on the full $75,000, in fact the 40% rate doesn't kick in until you are earning over $75k, but even if you were earning $75,500 you'd be taxed at lower rates up to the $75k, then 40% on the $500.
You can earn up to $25,000 and tax rate is only 15%, then 30% on the next $50,000, then aformentioned 40% kicks in after $75,000 (in total). Higher rate still for those fortunate enough to earn over $150,000.
Just checked, and if you are earning $75,000 you'd pay tax of $17,850, which is an effective rate of 23.4%, which doesn't sound nearly so bad!
There will be medi-care levi on top of that, can't remember exactly how much but something like 1% over $50,000.
Also, as the previous poster noted, you will be able to deduct some expenses if they are genuinly work-related.
I work in an accountants firm (but try not to do too much tax), so if anybody in Sydney does need a good accountant pm me and I'll give you the details.
Might be a bit of a mis-conception here. You don't pay 40% on the full $75,000, in fact the 40% rate doesn't kick in until you are earning over $75k, but even if you were earning $75,500 you'd be taxed at lower rates up to the $75k, then 40% on the $500.
You can earn up to $25,000 and tax rate is only 15%, then 30% on the next $50,000, then aformentioned 40% kicks in after $75,000 (in total). Higher rate still for those fortunate enough to earn over $150,000.
Just checked, and if you are earning $75,000 you'd pay tax of $17,850, which is an effective rate of 23.4%, which doesn't sound nearly so bad!
There will be medi-care levi on top of that, can't remember exactly how much but something like 1% over $50,000.
Also, as the previous poster noted, you will be able to deduct some expenses if they are genuinly work-related.
I work in an accountants firm (but try not to do too much tax), so if anybody in Sydney does need a good accountant pm me and I'll give you the details.
From looking at all the differences, I might actually pay less tax in OZ!
Waahhaay bonus!
Cheers all,
Apr 12th 2007, 1:09 am
#13
Just Joined
Joined: Mar 2007
Posts: 18
Re: Tax for self employed tradesmen - query
Shazpow
