Paul2412

I've recently come to Oz (Sydney) on a 417 Visa. I've found an IT contract for a duration of 3 months using one of the recruitment agencies.

Looking at the tax calculators, and the fact that the super is inclusive of the hourly rate I'll have 38% deductions (29% income tax, 9% super).

I have a limited company in the UK, and when I contract using that I'm only liable for 20% corporation tax.

Is there any way I can use my company in the UK as an umbrella company here in Oz? I understand I get my super (minus 30%!!!) back when I leave Australia, but that's not much use to us whilst we are here and want to spend it in Australia!

Bermudashorts

You will need to pay Australian tax at Australian rates I am afraid. Many people pay tax at over 30% on average, just one of those facts of life.

Amazulu

Personal service companies are the in thing in the UK - I used to have one too. It's a completely different story here I'm afraid. It can be done but is not as easy. The ATO are like nazis compared to the IR in the UK (where you can get away with murder on tax as they are pretty useless).

I've been reading recently about how much tax 'avoidance' is going on by the use of PSC's in the UK. I expect the government there to start clamping down pretty soon.

Paul2412

Fair enough, I didn't think it would be quite that easy. Thanks for the advice.

Tramps_mate

16 billion a year is the figure I read. That's 5 years of NHS cuts! Needs clamping down on..

Kiwipaul

Seem to remember that if you want to contract here using a company structure and you are the only contractor in the company you have to have multiple contracts and one contract cannot ammount to more than x% of companies total income.

One way around this is for a group of independent contractors to form a company together and so long as they have contracts with different companies you comply. Agencies who supply contractor can organise this.

Never done it but this was advise I recieved. Was simpler to become PAYE contractor.

Amazulu

That's basically how it is. There is also sole trader, which is a simpler form of self-employment but cannot claim the same deductions or pay company tax.

Paul2412

Hmm. I've just received my first pay slip and I've been taxed 45%. Is this correct? I gave the agency my TFN, and this is the first pay slip in Australia. Seems a little steep if this is correct! Coupled with super, I get 54% deductions...

I'm on a 417 working holiday Visa.

Bermudashorts

Have you not provided a TFN? Or did you provide it after payroll. I believe 45pc is the deduction I no TFN is available. It will be corrected in due course.

Tramps_mate

Does the tax get rebated like in the UK?

Paul2412

Apparently I didn't tick something related to tax relief, so the tax office takes it as my second income which is taxed at 45%.

I've changed that now, and the agency said that it should now reduce to around 29%. He also mentioned that because the tax year ends in June I should get a lump sum of tax back then. Can anyone confirm this? I've only been working here for 2 weeks so far.

Bermudashorts

You will get your overpaid tax back. Not 100pc sure if it will true up within the year (like it would in the UK) or whether it would come through after you do your tax return.

Tramps_mate

I was told to apply online for my TFN. I filled all the stuff in online and then it said, yes you are eligible for a number, but apply when you arrive in Oz..

How quick does the number come through?

Tramps_mate

I was told to apply online for my TFN. I filled all the stuff in online and then it said, yes you are eligible for a number, but apply when you arrive in Oz..

How quick does the number come through?

Paul2412

I applied for mine when I got here, and it came about 10 days later.