Any IT Contractors here?
 

Hi,
I'm moving over in a couple of weeks and luckily have an initial 6 month contract lined up at what looks like a decent rate. The agency I'm working through is offering to pay me PAYE and have sent me figures which line up with normal tax.

Do contractors in Australia generally work PAYE? I've had a LTD company in the UK for years and there are tax advantages to be had by doing so but these look much more limited in Australia, can I structure any other benefit from contracting in Australia (company car, home office, deffered income etc?).

I know I'll need to get professional advice but as I'm starting all over again any pointers would be great, even where to find the professional advice ;)

Thanks,

Mike

Re: Any IT Contractors here?
 

Hi

I see nobody responded to your post and I have all the same questions. Never contracted before but aim to start when I arrive this year.

Any pointers based on your experiences ?

Cheers

Re: Any IT Contractors here?
 

There are companies that will deal with the tax etc for you and allow things such as novated leases on cars, which is one step better than PAYE. Check out "cxc", plus there are others.

Ltd companies do not seem to attract the same tax advantages as in the UK. Well not that I have found so far...

Re: Any IT Contractors here?
 

It seems to me that people running their own companies might have to prove they have lots of different clients, may fall foul of the 80.20 rule - end up being treated as Personal Services income. Add on the cost of liability insurance and often being paid payroll is easier. A lot of tax is paid - but if you are happy with the NET it might be OK.

I thought IR35 had made it harder in the UK too. That might have changed now.

Re: Any IT Contractors here?
 

I'll be turning up to contract myself in a few months.

From speaking to friends and looking here most seem to do it via an agency and PAYE.

Re: Any IT Contractors here?
 

Wasn't too much of a problem for me, the last few years of my contracting was
1 month
4 months
9 months
2 months off to recce Australia
3 months
2 months

Having said that if you are willing to take a risk, pay the difference off the mortgage and re-mortgage if the tax man comes chasing and save on interest in the mean time.

Re: Any IT Contractors here?
 

Good - you had lots of clients. I certainly would put all my invoice into the mortgage and reduce interest pending the GST and tax bill - whatever it might be.

Re: Any IT Contractors here?
 

I picked all the high paying really busy short term ones :-)

Re: Any IT Contractors here?
 

That's the way. BTW - I've been contracting (after being perm for 5 years) for just over a year now and like it. So I'm thinking of getting off payroll - and swapping my role every 6 months minimum. Infact, 6 months seems the norm here in Melbourne.

But I can't be arsed. That's the thing.:p

Re: Any IT Contractors here?
 

Tha majority of contractors I deal with are Pty Ltd. Actually, I don't touch PAYE contractors at all. Pty Ltd or an umbrella company.

Re: Any IT Contractors here?
 

Do it. You won't regret it.

Re: Any IT Contractors here?
 

IR35 was a Gordon Brown-made disaster - a lesson in how not to do tax legislation. Nealry everyone has managed to avoid it. Talking to mates back there in July, and none of them are contracting under IR35.

Re: Any IT Contractors here?
 

Why is that exactly? I've had no issues as PAYE for one of the major financial institutions, but I'm also well used to running a Ltd company.

Re: Any IT Contractors here?
 

My hubby is an IT contractor and does all the novated lease stuff etc. He pays a management company to help with various things. He also claims back just about everything he buys that could be used for his job. :rolleyes:

I'll find out all the relevant details later on and post. (that's about as much as I know offhand, the rest is boooorrrriiiinnng). :D

Re: Any IT Contractors here?
 

Administration. A PAYE contractor is essentially an employee and needs to be treated as such, so for me that means I have to deal with super, medicare, tax and all the other stuff that goes along with employing people including notice periods, holidays... Too much risk with PAYE.

Pty Ltd contractors are easier. Business rules apply. They invoice me and I pay them and I don't have to worry about all the other superfluous stuff. Still have to deal with payroll tax though. :frown:

The type of contractors I deal with though are contractors through and through and wouldn't even dream about going PAYE.