A Small Take Away Shop Earns What a Year before Tax? You'll Be Surprised!

Aerith-Waifu on 28/06/2022 - 15:58
Last edited 28/06/2022 - 17:17 by 1 other user

I recently started a bit of UberEats driving and getting to know some of the owners very well, the most stand out one is a small Asian Take Away shop which purely rely on UberEats, DoorDash etc and he said the times are so tough he now makes less than $100k a year after all expenses before tax, this seems like a reasonable amount until he told me how many hours he work per week, 12 hours a day for 7 days.

I was shocked to see the work he putting in and not earning that much, works out to be around $22.89 an hour no superannuation included…………….

Does anyone know a small takeaway shop earns decent money or owns one or knows someone who has one and like to share their story?

Food & Grocery

Comments

          • [Deactivated] on 29/06/2022 - 07:17

            @AustriaBargain: Just to be clear, this wasn't in some hidden alley way, this was in the main street of a popular beach town. The food also wasn't bad either, I think it's just chicken shops in general have a hard time. Several in my town change hands so often and have closed down. Those that remain often do something else rather than just serve chicken.

            Edit: I take it back, there's been some huge successes with chicken shops on this thread

    • Aerith-Waifu on 28/06/2022 - 20:16

      And how many years they did it before saying enough is enough?

      • [Deactivated] on 28/06/2022 - 20:46
        +1

        4-5 years. They've realised working for someone, getting a paycheck at the end of each week and not having to worry when you come home is much easier.

        • Aerith-Waifu on 28/06/2022 - 22:16

          would their business improve dramatically if they continuing doing it? I mean once the business is established in the area, you would pretty much have a lot of people getting used to it? No?

          • [Deactivated] on 29/06/2022 - 07:15

            @Aerith-Waifu: Nope, the owners who bought it after closed it down

    • YepYeppers on 28/06/2022 - 21:45

      Completely untrue. There are many who make good money. Just need to know the market and pull the right levers at the right time. Need to work smarter not harder.

      • Aerith-Waifu on 28/06/2022 - 22:31
        +2

        Some burger shops are doing really well, you can see the owners are very happy and dont see any stress on their faces.

        I mean who doesnt like a good burger shop service excellent local made food.

        • Miss B on 29/06/2022 - 12:54
          +1

          When even McDonald's are charging $10 for a burger, burgers places can charge $15+ for a burger, then add more for fries and a drink $20+. I can get a plate full of Dumplings for $10. Asian food is often priced too low in comparison to burger restaurants.

          • Griffindinho on 01/07/2022 - 10:29

            @Miss B: Because they can afford to pay their staff lower wages

        • Sensiekatie on 29/06/2022 - 13:22
          +2

          I'm talking a very long time ago and in NZ, but we had a friend who had a predominantly burger takeaway joint in a town of 50,000 plus another similar sized town 30 km away. He did sell other things.

          He was very astute in his business and opened very late. He caught the people who had been out on the town and got the munchies (no doubt often drug induced). I don't think he even bOthered opening during the day. Within a few years he bought a house and rented it out. By his 30's, he had 24 rental houses and had long given up the takeaway. His food was also good quality as well as the service.

          Also reminds me of my parents during my childhood. They were at a party and people decided they were hungry (obviously long before Macca's). Dad and a family friend walked into a takeaway joint just before they closed (around midnight) and asked for 50 hamburgers. The guy looked at them very strangely, so they whacked the cash on the counter. They got their 50 hamburgers.

          These days you can't get a cup of coffee after 3 pm in A lot of places here and food places mostly closed by 8 or 9 pm (other than the fast food big guys).

      • [Deactivated] on 30/06/2022 - 15:56

        What's untrue? My personal experience or a business taking a lot more to run than an average 9-5 job?

    • ozbjunkie on 29/06/2022 - 10:25
      +7

      Condolences and hope your experiences have improved.

      My childhood in Australia would not have been the same without the Chinese or Greek fish n chips and burger joints, Vietnamese, Thai, Italian, Indian.

      A multilayered cultural pastiche is what I think of when I think of Australia. I know I'm not the only one.

    • Click_It on 29/06/2022 - 20:03

      I'm one of those people who could never work for someone else, haven't for years. Technically I am a contractor but I have 2 other online 'side hustles' too. The point of this is, that if you really want to be free of making someone else's retirement dreams come true, there are more ways than ever for someone to break away from the rat race. I'm amazed at how much of a barrier people make this out to be. It's not easy but it's also not that hard. Research, a lot of dedication and hard work, but in a few years, you'll be working less than you are in your current job and making more money if you did it right. Society doesn't teach us what an Entrepreneur is, so most of us think it's impossible.

      I'm not talking about opening a chicken takeaway shop either. This is 2022, think bigger and think smarter than that.

      The truth is, 99% will never try which means the 1% who do it find the world is their oyster. As my mentor says, there are 2 types of people. Consumers and Producers. Be a producer and you'll never have a problem making money again.

      Sorry, going to slip back into OzBargain mode now. Coles, $11 chook, half price $5.50 night time special. Nothing to see here!

      • [Deactivated] on 30/06/2022 - 07:16
        +1

        I'm a high school teacher at a poor government school, I don't mind making other people's goals a reality :)

        • Click_It on 30/06/2022 - 11:54

          I'm a facilitator in my main role and have gotten hundreds of young trainees, most only fresh out of high school, into a secure government department where not a soul lost their jobs during the pandemic.

          Doesn't mean sky can't be the limit for ourselves too :)

          BTW, Your job is arguably harder than mine, my hat goes off to you. My own daughter is 2 years away from a public high school education herself.

      • Caped Baldy on 30/06/2022 - 13:49

        The truth is, 99% will never try which means the 1% who do it find the world is their oyster. As my mentor says, there are 2 types of people. Consumers and Producers. Be a producer and you'll never have a problem making money again.

        This is the problem with the policies that have promoted housing. People are less likely to take financial risks such as starting a business if 50% of their pay goes to housing.

        If you don't mind, what are your side hustles?

        • Click_It on 30/06/2022 - 14:11
          +2

          Housing is a tricky one. There are also plenty of strategies there to make into a side hustle. Short term rentals such as airbnb, rent sublet so you don't have to own anything is one. Seller joint venture reno flips (also don't have to own anything) but starting out in property , there is nothing remotely passive available there unless you have big capital to start with - so most of it is a lot of hands on work which may or may not be suitable (I decided it wasn't suitable for me and am keeping it more as a long game strategy to come back to, but I know plenty who've started with nothing and built it all in property who'd disagree with me).

          My side hustles are crypto trade & investments (generally frowned upon in this community) and eCommerce. There's 1,000,001 things people can do, most just put it in the too hard basket. Retail arbitrage is readily available for anyone, cheap quick and easy. Drop shipping, the choices are endless.

          The only advice I'd give to anyone is to change they way the view failure because failure is part of the growth cycle, if you're one to avoid failure at all costs then stepping outside of the safe lane is not going to end well. But if you can take it on the chin and learn from it, then sky's the limit. We're taught to not take chances, view failure as a bad thing and don't question anything.

          • Griffindinho on 01/07/2022 - 10:31
            +1

            @Click_It: Crypto and other speculative “investments” are just gambling.

            • Click_It on 01/07/2022 - 12:33
              -1

              @Griffindinho: Don't do what I do then 😎 Been 'gambling' with house money for years now.

  • CyberMurning on 28/06/2022 - 17:19

    remind me of "better call saul" tv show

    • foxmulder on 28/06/2022 - 18:22
      +1

      Which bit?

      • Aerith-Waifu on 28/06/2022 - 20:16

        wants to know too

      • MasteBlaster on 29/06/2022 - 14:58
        +2

        probably talking about Los Polos in general. its in Better Call Saul and Breaking Bad too… Spoiler alert…. the chicken shop is more or less a cover for the drug business.

        • qwijibo on 29/06/2022 - 16:58
          +1

          The nail salon was where the money was at. Cash business, you layer in the non-taxed gains from the meth empire in with the regular customer revenue, and nice-sparkly clean fully-tax-paid cash goes into the bank account.

          I'm pretty sure the only way some small businesses in some parts of Sydney are profitable is by laundering cash for the bikies/mafia.

  • screensaver on 28/06/2022 - 17:31

    I would be out delivering the nearby orders myself

    • Aerith-Waifu on 28/06/2022 - 20:18

      No chance, on the weekend there are always 5 - 6 delivery guys waiting for orders and they are barely doing the orders quick enough as it is. I sometimes have to wait 30mins before the food comes out.

      They are busy enough no doubt, but with everything going through the roof, its not going to help.

      • boomramada on 29/06/2022 - 15:43
        +1

        That's there issue, relying on delivery services, dont they take at least 30% cut top of delivery fee?

        • BuyOrNot on 29/06/2022 - 19:10

          The menu price for delivery services is higher though.

  • Ocker on 28/06/2022 - 17:31
    +3

    And to think they still pay Uber, etc about 30% on their sales

    • Aerith-Waifu on 28/06/2022 - 20:19
      +1

      Yeah you are about right, its 30% + delivery fees.

      I once had a guy live across the road and didnt want to pick up the food himself, paid me $9 to delivery 100m………………go figure………..

      • [Deactivated] on 28/06/2022 - 20:45

        One of the grads at work says she regularly pays a $7-10 delivery fee to have her favourite thai meal for dinner delivered to her apartment on the 7th level of the same complex above the restaurant.

        • Aerith-Waifu on 28/06/2022 - 22:19
          +3

          Depends on the distance and if there is a surge or a hotzone. Like last night I did 3 delivery for Doordash, the surge is an additional $6 per delivery, so the 3 delivery I did earned me about $52.22 in less than 60 mins.

          It really depends on the area and if there is a surge happening or not.

          I have worked for $22 an hour on a really crap day and also $40 an hour on a very good day. My average at the moment is around $32 - $33 an hour. I been trying very hard to get to the $35 an hour rate but its very hard. I think on average the max I am able to do on average is around $30 - $32. I hardly falls below $30 an hour except on really crap days.

          • ModBot on 29/06/2022 - 07:39

            @Aerith-Waifu: Are you using a bike or a motorbike to achieve this? I've heard horror stories from UberEats drivers with too many people on the road.

        • [Deactivated] on 29/06/2022 - 07:18
          +2

          NGL, 80% of the effort to pick something up is just leaving the house, 1 minute, 5 minutes, once I'm out, I'm out. In saying that, I never order delivery but I know the feeling.

          • [Deactivated] on 29/06/2022 - 10:47

            @[Deactivated]: It's the convenience of having it delivered. The grad could easily phone in her order on her way home & pay when she picks it up from the restaurant on her way to the lift to her apartment, This would also ensure that 100% of the order cost would go to the restaurant however convenience trumps everything else.

      • t_c on 29/06/2022 - 06:33
        +2

        If they hire there own delivery staff, doesn't the uber fee reduce to 15%?

        That seems very reasonable for a well maintained state of the art online ordering system, with marketing to access 1000s of new customers, that otherwise wouldn't be able to order from the business.

        Good programmers don't come cheap, to build and maintain a online ordering system and then to pump money every week into adwords and SEO and fb ads to promote it would probably end up costing a lot more than a paltry 15%.

    • daleyboy79 on 29/06/2022 - 10:05
      +4

      Hence why the food prices on Uber are usually 30% higher.

  • SnowDragon on 28/06/2022 - 18:32
    +2

    I reckon Takeaway shops are a dying industry.

    I worked at one in my teens stocking the shelves and the owners worked 15 hour days 7 days a week. It wasn't uncommon for the owner to slip cash into his pocket every now and then at the end of the day.

    With delivery apps and barely anyone using cash, it's not hard to see how the tax man would be taking a lot of their hard earned coin.

    I bet Pauline Hanson is glad she got out when she did.

    • AustriaBargain on 28/06/2022 - 19:20

      I don't think they are going anywhere. People literally love food. You should see the DMs takeaway places get daily, people take their junk food very seriously.

      I've been told the ATO takes into account that these places are ripping them off, apparently petty tax fraud is factored in already. Then again I get told all sorts of things and it's probably hearsay to the businesses telling me it in the first place. But it makes sense that the ATO knows that it has been routinely going on ever since Captain Cook first planted the Union Jack into Uluru.

      • Aerith-Waifu on 28/06/2022 - 20:21
        +10

        I rather the government goes after the multinational rather than the hard working people trying to get some sort of decent living…………..

        • xdigger on 29/06/2022 - 08:54
          +2

          Shower thought, but if Australia had a 20% flat tax instead of a convoluted tax regime the super rich (networth >$50 million) will not be able to instruct their accountants to pay nothing in taxes. The medical surgeon who studied for a decade and worked nights and weekends should be entitled to the million dollars annual salary he earns but unfortunately he pays back nearly half in taxes, while Google Australia and Apple Australia pays next to nothing for years due to accounting magic.

          The accountant class is one of the highest paying profession in this country, but yet is a net negative contribution to society. Billions spent on the ATO budget for tax enforcement of hardworking Australians could have gone to healthcare and education instead.

          • Fobsessive on 29/06/2022 - 14:42
            +1

            @xdigger: "accountant class is one of the highest paying profession in this country" lol

          • Guerilla89 on 29/06/2022 - 14:54
            +1

            @xdigger: Our tax legislation has more holes in it that swiss cheese, all there for the politicians.
            * Negative gearing is a crime, not only does it give investors a tax cut it also turns houses into an investment rather than a home.
            * If you own shares for more than a year and sell them you only pay 50% of the tax on them… what???
            * The amount of bullshittery that the older generation pull with superannuation to avoid tax is disgusting

            I'm hoping the younger generations can give Australia back to itself but I'm not holding my breath.

  • Ryk on 28/06/2022 - 20:14
    +5

    Child Care, that's where the money is.

    • Aerith-Waifu on 28/06/2022 - 20:20
      +1

      Really? How so? Government support?

    • Jason Genova on 29/06/2022 - 08:46
      +4

      yep, especially when they are rorting the good aussie taxpayer

      https://www.9news.com.au/national/childcare-fraud-raids-live…

    • dcash on 29/06/2022 - 09:40
      +3

      Very true. The "principal" at my local pre-school was only there a couple of days a week for a couple of hours each day, and they were always driving around in a brand new Mercedes, and never seen without a Birkin bag.

      • Archi on 29/06/2022 - 11:19
        +2

        arghh… i see success is measured in mercs and birkin bags..

    • Click_It on 29/06/2022 - 20:08

      I assume you're joking but it's true if you own them. I know people with child care facilities in their property portfolios, it's not uncommon to see them bringing in 250K each without ever walking into the place.

      • kalithreaver on 30/06/2022 - 08:34

        The people bringing in the 250k with their property portfolio, is that the owners of the building or do they own the business too?

  • Ughhh on 28/06/2022 - 20:26

    Everyone would be doing it and being their own boss if it was that easy.

    • Aerith-Waifu on 28/06/2022 - 22:21

      Yeah well said, and not everyone likes cooking for others.

      As they have their dinner at around 11:30pm most of the time. Some days I do some pick up and see them at between 11 to 12 at night and they just started eating dinner.

      Really stuff up the whole biological cycle as well

  • JIMB0 on 28/06/2022 - 20:38

    I know a bloke who started his own takeaway/restaurant. Poured all his savings into it and lots of time both setting it up and running it. He was also working another full time job which basically supported the business. In the end he sold up and received a fraction of what was put into the business. It was an expensive lesson in how not to go about starting and running a business.

    • Aerith-Waifu on 28/06/2022 - 22:21

      Started his own? Not a franchise?

    • Typical16-bitEnjoyer on 29/06/2022 - 12:33
      +2

      So he had an unviable business, that he made even more unviable by working elsewhere full time?

      More common than you think.

      • JIMB0 on 29/06/2022 - 13:59

        Working elsewhere full time made it viable. Without that money coming in the business would have no cashflow.

        • Typical16-bitEnjoyer on 01/07/2022 - 10:10

          Any business is "viable" if it injected with free capital? lol interesting reasoning there.

          The business was unviable and your bloke had no idea what they were doing. Sorry not sorry.

          • JIMB0 on 01/07/2022 - 13:37

            @Typical16-bitEnjoyer: It's a sad tale. He also missed out on the opportunity to make a lot more money in the full time job as all his spare time went into working at the business.

            • Typical16-bitEnjoyer on 05/07/2022 - 13:05

              @JIMB0: Possibly sad but very common tale. Obviously wasn't skilled or experienced to start or run a business. Working elsewhere to fund it is just an inevitable spiral to insolvency.

  • askme69 on 28/06/2022 - 20:43

    I know quite a few and financials.

    Operating on about 40-50% in the pocket includes CASH. They are turning over around $12-20k, the owners (husband and wife) in all cases are getting $6-10k per week. They also recieve low income earners rebates.

    They all own multiple properties and have more electronics, clothes, jewellery, muscle cars etc, etc than you can imagine. The residences are average on the outside but are like the Taj Mahal on the inside.

    PS: these are Fish and Chip shops.

    On the otherhand i know of an Asian family who deal in the Asian takeaways in food halls at shopping centres. They have 8 shops in NSW, each shop only clears around $2,500 each, but 8 of them adds up.

    • Aerith-Waifu on 28/06/2022 - 22:23

      How do they get away from the ATO? I mean seriously we talking a lot of money been made here and how are they still able to get social benefit?

      I understand if they get a way for a few year but to continuingly get away sounds a bit odd for me…………

    • Aerith-Waifu on 28/06/2022 - 22:24

      Also does fish and chip shop really have that much margins?

      • TheBird on 29/06/2022 - 15:02

        On a lot of the lines, yes.

    • Quantumcat on 29/06/2022 - 07:50
      +2

      Sounds unlikely. They would never get loans to get properties if their income on paper was that low.

      • askme69 on 02/07/2022 - 18:45

        Investment properties and they can stump up cash deposits.

  • baker bob on 28/06/2022 - 22:09

    Surprised he makes that much if he is wholly reliant on delivery services that charge huge commissions, his margins would be slim so that's why he needs volume hence the hours he is doing.

    • Aerith-Waifu on 28/06/2022 - 22:25

      His eating in has been closed since the covid started, no one wants to work and because the max they can seat (by my guess) is maybe 10 people, its all takeaway they are servicing.

      I actually asked him why dont they start the dining again and he flat out said the more they dine (the customers), the more (the owners) they lose.

      • nightmarez3k on 30/06/2022 - 00:19

        Makes sense. No eat in no staff wages.

        He keeps all the money made. He just cooks the food. No waiters, no cashier, no delivery driver.

        Probably happy to cut all the out for 30 percent fee.

      • superuser on 30/06/2022 - 09:23

        Wtf? What about the local pubs and casinos? I thought they need people to dine in.

  • Aerith-Waifu on 28/06/2022 - 22:33
    +2

    I wonder what would do to the small business after the 1st of July with the new wage rise……………$7 for a cup of coffee is on the card in Perth i think

    • SKiZO on 29/06/2022 - 15:26

      Plus super increase to 10.5% from 1st of July.

  • BewareOfThe Dog on 28/06/2022 - 23:00

    I spoke to an old Mediterranean man who had a chip shop on a busy main thoroughfare for 25 plus years. In all that time he worked hours like that , and only had 2 days off which was for his daughters weddings. He said it was like a prison, and he has no choice. He couldn't have holidays because he couldn't trust anyone, to run it properly or not embezzle money.

    • Aerith-Waifu on 28/06/2022 - 23:13

      25 years and only 2 days off………..i feel sad for that old gentleman……………

      • BewareOfThe Dog on 28/06/2022 - 23:14

        Yes. I felt like he was telling me to stop working 7 days a week in my own business.

    • plmko on 28/06/2022 - 23:23
      +3

      That old man probably has 10 prime properties in Sydney and $10mil in cash under his bed.

      The reality is he could've quit 10 years ahead but chose to stick to stacking more money than a single cent he'll never spend anyway.

      • BewareOfThe Dog on 29/06/2022 - 09:42
        +1

        Yes, I thought the same thing about all the building he may have owned, but he endured misery for 25 years, and when he retired, probably had no idea what to do.

    • Quantumcat on 29/06/2022 - 07:52

      Why didn't he just install security cameras so as to not worry about employees stealing?

      • BewareOfThe Dog on 29/06/2022 - 09:40

        This was 20 years ago he had the shop, so it would have been expensive at the time. And like most SBO's at the time, he would have been tight as.

    • Typical16-bitEnjoyer on 29/06/2022 - 12:36
      +2

      So funnily/unfunnily enough, this is a common example of a lazy business owner. Knows how to do the work and pay the bills, doesn't know how to manage staff or grow the business.

      The timeloop he found himself in was the result of his own laziness.

      • greatlamp on 29/06/2022 - 15:35
        +2

        You can find people worth leaving in charge of your business over the weekend. They aren't going to hang around if you are only offering sub-par wages.

        These kind of business owners would never dream of offering a fair partnership/profit share deal to an employee

        • Typical16-bitEnjoyer on 01/07/2022 - 10:12
          +2

          Because they're lazy AND cheapskates.

          His prison was entirely constructed by his actions.

  • AsukaST on 29/06/2022 - 03:47
    +13

    Welcome to Australia where hardworking citizens pay high tax to subsidies lazy oxygen thief.
    Not to mention greedy unions keep asking for more without improving productivity,
    and governments that spend 25 million on a stupid flag pole to show political correctness rather than improving our infrastructure.
    Don't forget our ports' efficiency are ranked the lowest 25% in the world, thanks to unions.

    This is why everyone has left this land and shifted their production lines to Southeast Asia.
    Foreign investors are not willing to enter our market except one evil communist who put many developing countries in unsustainable debt.
    Good luck to Australia when we run out of natural resources one day.

    • Grunntt on 29/06/2022 - 08:49

      Not to mention greedy unions keep asking for more without improving productivity

      Fixed it for you - "Not to mention greedy companies keeping wages low whilst demanding productivity increases to pay more to CEOs and shareholders."

      eg https://www.epi.org/productivity-pay-gap/

      (a US article but still relevant here too)

    • xdigger on 29/06/2022 - 09:03
      +4

      Yeah mate, did you know we spend more on NDIS and aged pensions than healthcare in the budget? Private NDIS companies are rorting the system, to the extent that hospital emergency departments now have record-breaking waiting times post-covid, and if you go to a bulk billing GP they get $37 for that 15 minutes, not much more than a Tafe hairdresser who didn't have to study for a decade to become a doctor.

      • oztite on 29/06/2022 - 13:01

        Correction, they bill Medicare $37, the doctors themselves keep 40-50% only (rest is clinic service fee to pay for staff, rental etc), so $18/15min = $75/hr as a contractor with no leave or super. Not bad, but not good… around the level of a junior tradie.

        • Hausmaus on 29/06/2022 - 18:43
          +2

          We truly are a country that values selling dirt and lowly skilled jobs like trades, over high tech, IT and sciences given how we remunerate people in those industries, after factoring in tax.

          No wonder even though we are the size of USA we are only semi developed and home to less than a tenth of USA's population.

        • hayne on 30/06/2022 - 01:47

          @oztite: Doctors keep anywhere from 65-75% of their fee. Not sure where you got 40-50% from.

          Then plenty of clinics charge a lot more than the $37 bulk-bill fee. $75-$80+ per patient is not uncommon for 15 minutes. More if they see someone with chronic disease.

          The average GP salary is around $300k a year.

          They play an important role in society - incredibly hard to get into a medical degree, takes 6 years of grueling study and then more years of being a registrar before you can become a doctor. They help their patients and save lives. So not begrudging the fact that doctors earn a good living.

          But let's get the facts straight.

  • SlickMick on 29/06/2022 - 07:50
    +4

    It's really common for small business owners to not pay themselves or family. They wouldn't survive if they had to be paid for their labour.

    • Grunntt on 29/06/2022 - 08:52
      +1

      I've had this quoted to me a few times but no one has explained to me exactly how these unpaid owners and family members actually live without any income at all.
      Seems to me to be a grab for sympathy for the 'poor, unpaid owners and families' more than an accurate reflection of reality.

      They wouldn't survive if they had to be paid for their labour

      How do they survive in practice without a cent of income?

      • Uchuujin on 29/06/2022 - 10:08
        +1

        Cashflow. Oftentimes in these literal mom n pop operations and especially at startup, the owners are a couple/family (my parents/family in my personal situation) that don't draw a wage; as long as there's cashflow, they just pay for whatever expenses the owners need as they need it; petrol, groceries, home/mortgage. Everything else either gets shovelled back into the business, or into the owners' mortgage/investmets/slushfund if it takes off and is a good year. If it's a bad year, and they're actually decent owners, they'll tighten their belts and sometimes take out loans or money from personal savings just to keep the company afloat. Basically, these kind of founder/owner operator businesses trade a set 'standard wage' for essentially paying off their 'living needs' in the hope that the business will one day be profitable enough to provide more.

      • eek on 29/06/2022 - 10:34

        They don't necessarily need to pay themselves if the business structure is setup to optimise their expenses, plus if they are getting cash in hand, it can go straight to expenses like holidays, private school fees, entertainment etc. As an example if they ran a takeaway or grocery store, they could claim all their groceries/supplies for home as part of the business. Vehicles - registered under their business, claim either depreciation or instant write-off. It's just shifting all the income and expenses under the business rather than the individual. You get 'taxed again' paying yourself on top of the flat company tax rate, so it makes no sense either.

      • Typical16-bitEnjoyer on 29/06/2022 - 12:38
        +2

        They lease the cars through the business, pay for all fuel, groceries, bills and expenses through the business.

        They may not be "paying" themselves anything, but they aren't actually paying anything themselves, if you catch my drift.

      • SlickMick on 29/06/2022 - 13:41

        The business is earning $100,000. That's what they live off.
        But if there was 200 hours labour per week that was actually paid, they'd have gone out of business in the first year.

        • Grunntt on 29/06/2022 - 17:26

          So basically you are all saying that the owners do actually pay themselves by taking money, goods out of the business for their personal use but recording it as business use for taxation reasons.

          It may not be called wages in their accounts but they are definitely taking money out of the business for their labour.

          Appears to confirm -

          Seems to me to be a grab for sympathy for the 'poor, unpaid owners and families' more than an accurate reflection of reality.

          • Vater Woods on 29/06/2022 - 23:02
            +1

            @Grunntt: When doing Tax Return, ATO automatically deduct certain percentage of stock for personal use.

            So, not using some stock for personal use, its actually a loss for the owner.

          • SlickMick on 30/06/2022 - 07:59

            @Grunntt: No. If they paid wages, they would have to borrow, and the repayments would mean the business fails and no one would get paid.

            e.g. Son works 20 hours per week x 52 weeks @ $0ph.
            He is compensated with a roof over his head and meals supplied, but you get that in jail too.
            It's actually slavery if you want to get down to it.

            I'm not commenting whether it's good or bad - I think most economies would collapse without it.
            But you are way off.

            • Grunntt on 30/06/2022 - 08:47

              @SlickMick:

              No. If they paid wages, they would have to borrow, and the repayments would mean the business fails and no one would get paid.

              Just because it isn't in their accounts as wages does not mean it isn't.

              But you are way off.

              Money and goods taken from the business directly into the owners pocket, no matter what title you give it, is exactly the same thing as a wage.

              e.g. Son works 20 hours per week x 52 weeks @ $0ph.
              He is compensated with a roof over his head and meals supplied, but you get that in jail too.
              It's actually slavery if you want to get down to it.

              All work carried out for another person is technically slavery but, the compensation supplied to the son is also what can be titled a salary package (not a very good one for most people but it works for him).

              • SlickMick on 30/06/2022 - 09:20
                -1

                @Grunntt: I take it you aren't hear to understand this issue. I don't see any point in going around the loop again.

                • Grunntt on 30/06/2022 - 22:27
                  -1

                  @SlickMick:

                  I take it you aren't hear to understand this issue

                  Not sure which issue you think I'm not here to understand, seeing as all of my posts have been responding to your unsubstantiated statement that -

                  It's really common for small business owners to not pay themselves or family

                  I have not been discussing the rest of your later claims - just that single statement that you made as though it represents the truth of the situation.

                  I don't see any point in going around the loop again.

                  Finally something on which I can agree with you.

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