My partner is soon to start a new job where he will need to set aside his own tax. We've never had to do that before, I've seen the tax table so I'm on top of how much he will need to put aside, but I'm curious how other people do it? An account attached to your main account? Something completely seperate? High interest account? Advice/tips appreciated!
5 Replies
Do you mean starting work as a sub contractor? Business owner?
The weekly tax charts for employees are different to if you are self employed
Sub contracting. I have the correct tax chart.
I put it in a separate account. Just made it slightly easier.
I would put in seperate account. Don't forget if it is in a high interest account you need to pay tax on the interest earnt. Also if he isn't being paid super don't forget to pay some of that money into his super account
Im sure you've already done your research but just incase your unsure on anything to do with tax this is a good page to look at
https://www.ato.gov.au/individuals/working/working-as-a-contractor/
Unfortunately as an accountant I see a lot of subcontractors who have gotten in to trouble with the Ato by not realizing what is involved.
As for the tax amount, I would recommend a high interest online account that doesn't have a key card.
Transfer the money each week and then when you pay your tax each quarter there will be a bit left over from the interest. It's a great idea to do your super this was aswell so it doesn't stack up
Also a good idea for your gst obligations, transfer them as soon as you get them and then once you do bas and have deductions you will be left with a nice amount extra