Do I Need to Pay GST on My Contractor Work?

[Deactivated] on 10/07/2019 - 00:08

Hi OzzyB,

An easy question for anyone financially inclined.

I have a 9- 5 job and I'm paid as an employee with a base salary that's above $75,000 PA.

I've just started to do some extra contractor work that will be an additional 50k a year.

I'm trying to figure out if I need to pay GST on the contractor work.

I keep reading that "only need to register for GST if their turnover is greater than $75,000"

Is that only for the contractor component or does this also include my base salary from my employment?

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Comments

  • foxmulder on 10/07/2019 - 00:23
    +4

    That contactor work is the only thing counted towards the 75k, thus you are not required to be GST registered.

    • [Deactivated] on 10/07/2019 - 00:38

      Thanks mate :)

      • apsilon on 10/07/2019 - 06:31
        +2

        Just remember you also can't charge/collect GST or issue a tax invoice if you're not registered for GST.

  • whooah1979 on 10/07/2019 - 05:52

    Is your business related to the work that you do with your employer? Don't let them find out if it does.

  • Ocker on 10/07/2019 - 08:18

    If not registered for GST then naturally you should not charge GST. You should also tell the person you are billing so that they do not claim a GST credit input for your charge.
    I do seem to recall something about you needing to supply them a an ABN number as well, otherwise they should deduct withholding tax from their payment to you. Perhaps someone can clarify this point?

    • kipps on 10/07/2019 - 08:44

      Yes. Any invoice without a valid ABN attracts highest withholding.

    • loke on 10/07/2019 - 11:11

      https://www.ato.gov.au/forms/statement-by-a-supplier-not-quo…

      To further expand on this, no withholding tax is required ("no ABN withholding") by the ATO where a 'Statement by a supplier' is filled by the supplier and kept by the payer (e.g. think of your gumtree purchases in person, etc) - pending the criteria as listed on the webpage / form itself.

  • dasher86 on 10/07/2019 - 08:19
    -2

    How about go see an accountant?

    • [Deactivated] on 10/07/2019 - 11:38
      +1

      For a 10 second question? Seems like a waste of both our time.

      • dasher86 on 11/07/2019 - 07:50
        -2

        What I am saying is this is a simple question. If you don't know the answer what else are you missing?

  • Seraphin7 on 10/07/2019 - 09:26
    +2

    The two income sources are separate and the $75k GST thing only applies to your contractor income.

    That said, you may be better off registering for GST as you can then claim the GST on expenses incurred in earning that income.

    • scotty on 10/07/2019 - 12:07
      +2

      you may be better off registering for GST as you can then claim the GST on expenses

      This.

      By ATO's definition, OP does not need to register for GST thus do not need to charge GST for his clients, as the business turnover is below $75k. However,

      • If OP is a contractor, his clients are most likely business registered for GST as well, so charging extra 10% is not going to cost his clients more (they can claim against their GST payable in BAS).
      • However OP can now claim the GST on expenses
  • adam on 10/07/2019 - 13:01

    I'd recommend you register for & pay GST anyway. Add 10% on to your invoice & if the work you are doing is for a business they get to claim this back, so it doesn't cost them anything. Once registered for GST you can claim input tax credits, i.e. you can claim the GST portion back on items you purchase for your contracting business, this can be a decent benefit.

    • Typical16-bitEnjoyer on 10/07/2019 - 13:05
      +2

      Depends on if OP needs to purchase anything of significance for his contracting. It's a fair bit more bookkeeping once you're registered for GST.

      Being able to "undercut" by appearing cheaper with no GST is also useful. A lot of places just look at the final price and not the GST component which can be claimed.

  • Typical16-bitEnjoyer on 10/07/2019 - 13:02
    -1

    OP, read through all the requirements here.

    https://www.ato.gov.au/Business/Managing-your-small-business…

    • Typical16-bitEnjoyer on 11/07/2019 - 12:35

      Weird neg when this link

      1. Directly answers OP's question
      2. Is from an extremely reliable source - the actual ATO.
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