Advice of small business hiring staff overseas

yjun355 on 03/05/2023 - 22:16

I have small business (sole trader) and from time to time I used to go to freelancer.com.au and get help via virtaul assistant, designer, etc. This was easy for taxes as freelancer.com, you can see payments and get invoice, etc.

Now I decided to hire someone on fixed term from overseas. SO, i just transfer money to then directly from my overseas account.

I do have freelancer style agreement that i created: https://wise.com/us/freelance-contract/.

In terms of claiming for my business taxes, can i just show my transaction from overseas account (its in foreign currency) or do i need to send money directly from australia (like via Wise.com)?

Is that good enough to do for record keeping? I am going through my accountant at the moment. So, would be great if someone has advice from previous experiece so i ensure i am doing this correctly.

General Discussion

Comments

  • will05 on 03/05/2023 - 22:31
    +11

    basically you're asking aussies how to offshore their jobs ?

    • JafferMoney on 04/05/2023 - 09:10
      -1

      Yep…Aussies getting paid ridiculous amounts and keep wanting more and more benefits. Overseas staff are more humble, hard working and cost a lot less.

      • spc12go on 04/05/2023 - 10:06
        +1

        In that sense business trader should expect a humble profit.

      • ThithLord on 04/05/2023 - 15:28

        Aussie's have the gal to expect the right to urinate in a bathroom, as if an empty Sprite bottle is tooooo beneath them!

      • Sinnerator on 05/05/2023 - 08:44
        -1

        found the ungrateful immi

  • mskeggs on 03/05/2023 - 22:34
    +3

    You should probably have your contractor invoice you, so you have good records, but the currency doesn't matter.
    They aren't your employee, you are buying a service from an international supplier.

    • yjun355 on 03/05/2023 - 22:57
      -1

      thanks. yeah maybe that is easy to go. i can ask for quarterly or monthly income to keep it simple. i guess that's equivalent to how freelancer.com works as well

  • AustriaBargain on 03/05/2023 - 23:16
    +1

    I bet you'll find the freelancer website middleman protects you from a lot more than you realise.

    If you're making real money though with your business, why not hire an Australian? Anyone can be a bookkeeper so it would still be a lot cheaper than using a certified accountant to do your bookkeeping.

    • Kongzi on 04/05/2023 - 00:48

      That's not how capitalism works

    • yjun355 on 04/05/2023 - 04:50
      -2

      Im not making real money :). Obviously if it was i would keep it local myself.

      Lot of it to help charities. If you volunteering, you can help out

      • Hardlyworkin on 04/05/2023 - 07:25

        So you're a not for profit then? That should be easy.

        • yjun355 on 04/05/2023 - 07:39
          -2

          Thats correct. how would that make it easy? what am i missing here. do you run a not for profit as well? would love to get some tips on how you run it.

        • spackbace on 04/05/2023 - 16:08

          https://www.ozbargain.com.au/node/726548

          Background
          Me and my friend run a tech platform to help charities do fundraising.

  • Save 50 Cent on 04/05/2023 - 08:48

    $5 a day is hardly going change anything anyway. Just claim it. Very slim chance ATO will ask for evidence in the first place. If they do, then explain and show overseas account statement.
    PS: Not professional advice. Just telling you what I would do

    • Malik Nasser on 04/05/2023 - 09:55

      Yeah, the tax system relies on trust.
      The only time you could potentially run into a problem is if you are audited (what are the chances for a small not-for-profit?).
      I would think, as long as you have an employment contract, and can line that up with your OS bank transfers then that should be enough evidence.
      You will also need to calculate the foreign currency equivalent back to Australian dollars on the day of the payment (as our tax system is based on AUD).

  • hasher22 on 05/05/2023 - 14:52

    I am a freelancer and a sole trader as well that sometimes hires from fivverr, upwork etc…..

    To my understanding and I am 90% certain, you can claim the outsource work (whether it's in Australia or overseas) as a business expense like with any other expenses as it's through a freelance website, even if it's ongoing work…. they are technically contractors to you not an employee under your sole trader business

    But if you hire someone in Australia, for example, casual, part time etc… obviously you have to obey Australian pay laws such as tax withholding, super, benefits and you need to be registered for single touch payroll.

    Another method is cash in hand but I let you research if you want to go down that road.

    The best way to get your answer is the ATO forums, an official or experienced ATO rep will answer your question and give you an official ATO.gov.au link as a source to their answer.

    Don't ask OzBargain.

  • G-Dawg on 06/05/2023 - 19:32

    Agree re: not asking Ozbargain. Get an accountant as it can get complicated.

    E.g. I believe hiring someone overseas can becomes more complicated if they're engaged like an employee when compared with hiring them for a specified set of outputs.

    When I've hired people outside of oz I've always drawn up a consultancy style contract with payments attached to specific deliverables.

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