Working as a contractor

More and more employers start to reduce the numbers of their employees and begin to hire more contractors.

What if I start to work as a contractor?

You will need an ABN, if your income goes over $75,000 you must register for GST.

Am I a sole trader?

Yes, As a contractor, you can be an individual (sole trader) or working in your own company, partnership, or trust. You might even call yourself an independent contractor, sub-contractor or a ‘subbie’.

Contractors have different tax and super obligations to employees.

You need to start to consider yourself is running a business under your own name. If you begin to receive income from more than one client, you might need to think about to set up a business structure for asset protection reason.

What business structure suits me?

It is no easy answers. Everyone will think about a Company to run a business. The downside of a company is it pays a fixed tax rate, 30% (27.5% for Turnover less than 50M). It also has a complicated Franking system every time you pay a dividend to shareholders.

Trusts are relatively flexible system; however, it is not easy for the general public to understand. It also comes with a higher setup cost.

To understand what business structure suits your situation give us a call on 02 8011 4699 for your first free appointment today.