I'm employing someone on the dole with the Government wage subsidy scheme where 80% of the wages will be paid over three months by way of reimbursement. This will take someone off the dole completely. It will be for $500 and or 15hrs minimum a week and i can pay them what wage i want per hour. I think the going rate for renovation (labor) work is $17.50 per hour. It's casual employment!
I'm told to ask an accountant but thought i could get a brief from the forum first. Can anyone give me any idea what i have to do to employ someone? Web site links etc.
I registered an ABN 2003.
Haven't got a business name registered it lapsed few months ago but think i can just use my own name??
Do i have to pay tax how's that work?
Employee has a Tax File Number declaration form to fill out!Hi Daniel,
You will need to register for PAYG Withholding with the tax office, so that you can report and remit the amount of tax form your employee's wages.
This is usually done on the quarterly BAS. Are you currently registered for GST? If so, it will just be an extra section to fill out on your quarterly BAS. If not, you will get a whole new form to fill out!
The tax office has a calculator, to show you how much tax you need to withhold, available on their website. http://www.ato.gov.au/scripts/taxcalc/calc_standard_hire.asp
If your employee is earning over $450 per month, you also need to pay 9% superannuation. The employee has a right to choose the fund you are contributing to, but if they don't, you can set one up for them, with whichever fund you like.
Then, at the end of the year, you will need to provide a PAYG payment summary (formerly called group certificate), and remit a copy to the ATO.
Hi,
Thanks for comments.Can i sort out the tax i pay next financial year? I was under the impression super did not need to be paid for casuals?
Daniel Cameron wrote:Hi,
Thanks for comments.Can i sort out the tax i pay next financial year? I was under the impression super did not need to be paid for casuals?
Do you mean next July? I wouldn't advise that. The employer is required to withhold the amount of tax from their employees wages, so you would need to register and be remitting the withholding tax from the date of employment.
I'm sorry to say super is payable to casuals, as long as they are over 18, and earning more than $450 per month.
Watch out for the legal issues too, especially vicarious liability – you can be responsible for acts committed by your employee. Also make sure you have property insurance in place in case they fall off the roof or electrocute themselves etc.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
There are many issues involved in employing someone. Even the simple thing of super shows how easy it is to get bad advice. If you failed to pay the super you would be having a few issues with the tax office. As Terry started to touch on – Work Safe or the name of it in your state. Work place safety is big and complicated, if not done correctly. Simple things of not providing first aid kits, toilet facilities or safety training can led to a few headaches. Then there is work place relations. Hiring, firing etc. This area is changing frequently and its one reason i have had enough of employing people.
As you will be employing someone, you will take on all of the liabilities of an employer ie you will need to arrange workers compensation insurance (contact qbe or other provider), obviously super & payg will need to be paid (even a casual has a right to super), you will also need to determine the appropriate award that the person will be engaged eg construction industry labourer's award and hence the appropriate minimum wage rates (they may be skilled), travel allowance, tool allowance, minimum breaks, hours of work, training (oh&s, material handling, safe work method statements), construction industry 'green card' etc…….. Not as simple or cheap as you may have thought at first glance.
There is a way around a lot of that, You can get them to apply for a ABN and pay them as an independent, there is still legal stuff. but you are much less liable and you don’t have to with hold tax or super.
Many people in sales and commission jobs are paid this way. don’t see why it wouldn’t work for any other type of work too. but maybe check with the people on this forum about this method too.
Just cause you call them a contractor doesn't mean they are not an employee – there are various tests to determine this. So do be careful. Nevertheless it could be a good way.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Might have to change the thread title to "I'm not employing anyone"!
On the face of it this scheme seemed good and it may be for some don't want to put anyone off but after a lengthy discussion with my newly discovered accountant have decided that it's not going to be as big a win from my economical situation anyway as previously thought actually more a lose in the longer term in the bigger picture.
Asked the work placement person again how did you get info about super being zero for casuals, she said, "oh yes it is… it's zero, I'm curtain". Storms off to get some paper work evidence but couldn't find anything. Anyway i tend to believe whats said in this forum and the web sites i read including the ATO and the account also. A tonne of paper work involved in doing it.
Though that wasn't the deterrent have opted out of this set up for now. May be worth revisiting in a year or two's time.
Those accountants are worth it though i only had a chat and he never asked for any money i passed him a green $100 bill and said that you just saved me thousands and said i want to employ you on my team to take care of my property portfolio. Well least someone got a job and the poor old fella on the dole is back on the dole queue.
Thank for your info y'all.
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