Im an electrician and Im currently on $30 per hour tax file with benifits such as holidays, sick days and super paid. My boss has asked me to work abn. How do i know how much to charge. Ive tryed to find some sort of basic calculation to no avail. Is there a rule of thumb rough calc for this anyone knows without to much detail on all the tax stuff as i need to reply soon and will have the rest of the tax year to learn the in and outs of abn tax rules.
What you have to suss out is what all the extra payments apart from your wages your boss pays and for that I would strongly recommend going to see an accountant.
Some of the costs no longer covered by your employer
Workers comp insurance
Employer Superannuation contributions
Public liability insurance(?)
Payrole tax(?)
Business registration costs
Holiday Pay
Sick Pay
Long service leave.
the list goes on..
At the fear of feeding a troll (first poster)...as elmo said and also from my experience as self employed for over half my life and most of my working life - calculate everything based on an annual figure and work it back to an hourly rate.
Make sure you include holiday allowance/pay but don't include the 160 (?) hours when dividing the figure into the hourly rate as it's not billable time. Also include your super, insurances and any costs that you will incur as a contractor.
As a rough guide (when I employed people), it worked out that their charge-out rate was about double their gross hourly rate, that only just covered the employee's costs and entitlements...overhead charges had to be added to that figure.
$1200 a week converted to an ABN......
Hit him up for $100 and hour, also go and get that new Hilux (deductible)
If you have a boss and are expected to work the hours they set then according to the ATO you are still classified as an employee and the boss is required to pay your super and workplace insurance. Start here and suss out what is best for you.https://www.ato.gov.au/Business/Employee-or-contractor/How-to-determine-if-workers-are-employees-or-contractors/Mistakes-to-avoid/
Also don't forget that you can only do a maximum amount of 80%of your work for one employer or you are still classed as an employee & that means you are going to also have the hassle of finding more work elsewhere.
Yep, you can still work 100% for one company, but the tax breaks are better if you can meet the 80/20 rule.
Your boss will know exactly what the number is and if you offer significantly under it he will accept.
Will you need to do quarterly BAS statement and collect and forward GST?
Select to expand quoteLittle Jon said..
Your boss will know exactly what the number is and if you offer significantly under it he will accept.
I suppose on that basis he could calculate an hourly rate, double or triple it and negotiate backwards?
Select to expand quoteLittle Jon said...
Your boss will know exactly what the number is and if you offer significantly under it he will accept.
Will you need to do quarterly BAS statement and collect and forward GST?
You will only need to register for GST once you start earning over $70K (i think? Or maybe $80K) but you'd want to hope u were making at least that.
Well thanks for that green pat .
You live and learn .
One of the companies I work for require a quote before the invoice they believe that it gets around the 80/20 rule Ill be glad to not have to do that anymore although i doubt they will change there ways
Multiply by 150%. You're giving up sick days, holidays... and security.
Source: been ABN for 15 years.
Select to expand quoteactiomax said..
Well thanks for that green pat .
You live and learn .
One of the companies I work for require a quote before the invoice they believe that it gets around the 80/20 rule Ill be glad to not have to do that anymore although i doubt they will change there ways
Don't thank me, thank Elroy Jetson, it was there in the link he posted. I heard about the 80% once upon a time and took it at face value, but more recently knew a bloke who was doing 100% for the company I work for with an ABN and figured it must be legit as he's the sort of guy who's on top of such things.
Never had an ABN myself, and now our company is insisting on everyone being employees so even old mate isn't doing it now.
It's a bit of a sticky one, your employer is basically trying to cut paying for super ,sick, holidays, insurance? , however he has to be carefull, if he supply's vehicule, tools, then he should be employing you, if you supply your own vehicule , no company livery on the vehicule, tools , then your classes as a subcontractor, which means you can do outside work( if you've got your ticket), however he won't want that I'd say, I'm a carpenter and I've been down this path, my 1 st employer I was told by some super board hadn't paid my super, as he had me as a subcontractor, but supplied van ,( with company logo) trailer, tools, he'd chuck the shidtz if you had time off to do your own work, my accountant told me I needed in the taxation depts eyes to be activly seeking work from other means, ie advertising, I need $60 per hr to keep my head above water, and I don't lead a great lifestyle,
