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Self employed vs employed!

Self employed vs employed!

Old Mar 2nd 2010, 12:40 am
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Question Self employed vs employed!

Anyone out there who is self employed and can answer a few questions. I've only ever been employed on a salaried basis but may have the option of classing myself as either self employed or salaried in the near future. I will be employed as a locum so could be either.
What are the advantages of one over the other. From what I can see being self employed means I can offset various costs against tax but I will have more paperwork to do. I have no problem with sitting down for an hour or so and filling out my own tax return but what else would I need to do.
Where do I start? I'll have a look at the IRD website but any advice any of you good people can give me would be much appreciated
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Old Mar 2nd 2010, 4:09 am
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Default Re: Self employed vs employed!

Originally Posted by Persephone View Post
Anyone out there who is self employed and can answer a few questions. I've only ever been employed on a salaried basis but may have the option of classing myself as either self employed or salaried in the near future. I will be employed as a locum so could be either.
What are the advantages of one over the other. From what I can see being self employed means I can offset various costs against tax but I will have more paperwork to do. I have no problem with sitting down for an hour or so and filling out my own tax return but what else would I need to do.
Where do I start? I'll have a look at the IRD website but any advice any of you good people can give me would be much appreciated
Sue
I was s/e both in the Uk and NZ. I earned pennies over here and as such had no GST involvement, just 2 hours each April doing the IRD. You can offset lots of stuff for instance a cut of the bills from the household if you utilise an office..the car and ins etc, etc. The downside is no paid hols, no security as far as job protection goes and no one to give you a shining report every year. I would chose s/e over salaried any day. I am sick of working for others and in the main utterly useless management which seems to be the thing the world over..plus I loathe office politics and don't like being forced into social events that you are 'expected' to attend. Rant over.
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Old Mar 2nd 2010, 10:18 am
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Default Re: Self employed vs employed!

self employment.. its the way to go.

As far a book work and paper work.. get a copy of MYOB or Quickbooks.
They make GST a snip..

claim lots of normal bills as a business expense ( there is a book.. a bit out of date now.. but gives you a starting point called "slash your taxes")
and rather more ironically the author of the book.. an ex accountant.. was done for fraud later on.. seems that its a case of "do what i say.. not what i do"

You can claim a home office.. so a % of your electricity rent/mort.. phone, insurance etc.. car costs

down side is that you have no job security.. but hey guess what.. does anyone??

You source your own work.. at usually a much higher rate of pay.. which means you can budget for any quiet periods if you get any. and is also your holiday and sick pay..

expect to be working more than you plan.. you tend to say yes to every job out there until you realise that work is still going to arrive even if you say no.. for some this can take years.. others it seems they are much more relaxed about it... it took me a couple of years to say no to people.. so lots of long hours ( with a nice bit of dosh as compensation!!)

No brainer.. if you are lucky to be in an industry that lends itself to self employment.

oh and if you are nervous of the book keeping aspect.. get an accountant to do your end of year returns.. cost should be no more than a grand.. and you can claim it as an expense..
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Old Mar 2nd 2010, 10:06 pm
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Default Re: Self employed vs employed!

Thanks for your help Genesis and Deepsix. Will try and get those books from the library and investigate a little more. Thing is that I'll be doing exactly the same job whether I am salaried or self employed [and working with the same people in the same place] so will have to look at whether it is worth it and what is involved. Any equipment I need will be available at the workplace so essentially I would go in and provide a service, as far as I can see the only outlays are clothing [often provided anyway] and transport. I already claim tax back for registration fees. Or maybe I'm too lacking in imagination when it comes to the ways of avoiding paying tax
I cannot work from home so a home office isn't necessary.
I'm not too bothered about doing tax returns, I did one last year and it's not that arduous. Hmmm need to do some reading, thinking and maybe speak to an accountant.
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Old Mar 2nd 2010, 10:10 pm
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Default Re: Self employed vs employed!

the home office rule is something you should look into.
It doesnt mean that you have to work exclusively from hom.. just that you have a home office where you carry out some aspect of your job thats required to bring in cash.. be it administrative, or report writing.. the list is endless!!

check out the "slash your taxes" book.. it gives you a much better definition
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Old Mar 2nd 2010, 10:25 pm
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Default Re: Self employed vs employed!

Originally Posted by DeepSix View Post
the home office rule is something you should look into.
It doesnt mean that you have to work exclusively from hom.. just that you have a home office where you carry out some aspect of your job thats required to bring in cash.. be it administrative, or report writing.. the list is endless!!

check out the "slash your taxes" book.. it gives you a much better definition
Yes I'm obviously not imaginative enough

Will look for the book when I'm next at the library.
Just looked online and it's either out on loan or someone has reserved it so may have a bit of a wait!

Last edited by Persephone; Mar 2nd 2010 at 10:28 pm.
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