If you are now a part of Mable’s community of independent support workers– and if you are offering your services as a self-employed worker – you will need to remember to take control of your own tax and super. We’ve developed this quick guide to assist:
Setting aside money for tax
Being a self-employed independent support worker means that your income may not be consistent from month to month.
You want to manage your money well – check out our 9 steps to managing an unpredictable income.
We recommend to plan ahead accordingly. It may be difficult to pay tax bills in bulk once they are due, so to make life easier we recommend that you put money aside for this.
Please note that, if you do not meet your tax obligations, you could be at risk of a fine from the Australian Tax Office.
How much tax do I need to pay?
If you are unsure how much tax you need to pay, there are numerous income tax calculators available on the Internet. Check out Money Smart’s online income tax calculator to work out how much money you may need to put aside.
If your sole trader business is registered for Goods and Services Tax (GST), remember to set money aside for this also. Many home care services may be GST exempt, however its best to check with a financial advisor or accountant for your individual situation.
What are tax deductions?
Tax deductions are certain expenses you have incurred in order to earn your income. Deductions will reduce your taxable income before your tax is calculated.
Tax deductions may include things such as:
– Work related expenses
– Self education expenses
– Charitable donations
– The cost of managing your tax affairs (e.g. paying your accountant)
Keep track of your business expenses throughout the year. If you aren’t sure whether something is a valid expense call the ATO or ask your accountant.
Don’t forget your superannuation!
As you are a self-employed support worker, you will need to think about your superannuation. If you don’t put money towards your superannuation, you could risk not having enough money when you retire.
For eligible employees, the minimum superannuation payable by employers is 10% of an employee’s ordinary time earnings.
When you work for yourself, it’s up to you to ensure you are provisioning for your retirement. You might like to periodically transfer a lump sum to your superannuation fund.
|For example: during the first quarter of the financial year (1 July – 30 September 2016) Sally’s ordinary time earnings were $8,000 |
Therefore, using the super contribution guarantee as a guide Sally may want to transfer the following amount to her super fund:
You can check out The Australian Tax Office’s guide to superannuation for the self employed for further advice and information.
Note: The above information should not be considered legal, accounting or tax advice. We recommend you speak with an accountant or tax advisor or your financial advisor and we expressly disclaim any responsibility for any action taken or not taken based on this information.