Contracting v. Salaried Employment

[Daver6]

Consistently.

How does that translate into a workable tax policy?

 

[TomVexille]

How does that translate into a workable tax policy?

It doesn't. Some people just think the system should only advantage themselves and their specific situation only, and that the rest of us should subsidize their choices.

 

[JohnK]

How does that translate into a workable tax policy?

Allow all reasonable expenses associated with a primary place of employment.

Or don't allow any expenses even for contractors.

 

[Deleted member]

Wait till the end :

 

[rock86]

Allow all reasonable expenses associated with a primary place of employment.

Or don't allow any expenses even for contractors.

I'm so glad someone like yourself isn't allowed anywhere near our taxation system.

 

[sjk]

I've only been subject to the Australian tax system for around ten years, but it's a known variable and needs to be taken into account accordingly. I don't recall any changes that have been especially disadvantageous to salaried employees.

Best to focus on what applies to you and plan accordingly, rather than fret and worry and grumble--based on imperfect and incomplete information--about what rules apply to others.

The grass may look greener next door, but not everyone is capable of climbing over the fence.

 

[amaroo]

Marry a CA that specialises in tax - simples

 

[JohnK]

Marry a CA that specialises in tax - simples

Is that what you did?

 

[amaroo]

Is that what you did?

Yep, tax and SMSF is her thing. Only a comm grad when we met, but I could see the potential

 

[Denali]

....Best to focus on what applies to you .....

Similar words to John on other threads, nothing changes.

 

[Pushka]

Allow all reasonable expenses associated with a primary place of employment.

Or don't allow any expenses even for contractors.

Goodbye Business.

 

[burmans]

Allow all reasonable expenses associated with a primary place of employment.

Or don't allow any expenses even for contractors.

The problem here is pretty simple really, its pretty obvious from the weight of comments that you have a different view of what is reasonable than others. Most people think the government subsidising where you live is NOT reasonable.

And given one of the main reason people are contractors these days is because companies force them into this arrangement to take the liabilities off their book, most people thinks its reasonable that contractors can claim as business expenses the sort of things that a company would provide to an employee (and also claim as business expenses). the fact that employees cant claim them is irrelevant if the company has. And where you live, the company isn't claiming this because they aren't the ones suggesting you commute big distances.

 

[rock86]

Goodbye Business.

I really don't think he understand our tax system a great deal, he seems to think that contractors somehow get an unfair advantage by being allowed to claim more expenses then that of a person who is in a similar role but on a salary. There's actually no differentiation between what a contractor can claim v's what someone on a salary can, it's just that contractors actually have more expenses since they are required to cover a whole lot more then someone on a salary (due to the employees company covering their costs).

Contractors cannot claim their expenses travelling from home to work similar to an employee (both can claim this under certain circumstances though). Contractors can only claim the component of any of their expenses that relate to their work under a contract, the same as an employee only being able to claim those type of expenses which are directly attributable to their employment. The list goes on.

As for the reason a Contractor earns more, they take a whole lot more risk and have uncertainty of continuity of securing work; in most situations they also have to cover their own superannuation, insurance and have enough 'fat' to allow them to be able to take time off.

And why don't we allow anyone to claim travel from home to work, because it's a choice where you work and where you live. The tax system shouldn't subsidise a person's lifestyle choice, if you want a cheaper home but it costs you more to get to your place of employment that is your choice and the same goes for the opposite.

 

[Pushka]

What are People’s thoughts when the business relocates someone to a different state but for a variety of personal reasons they aren’t able to permanently reside there? Especially when that employee had been with the company for a few years?

 

[JohnK]

The problem here is pretty simple really, its pretty obvious from the weight of comments that you have a different view of what is reasonable than others. Most people think the government subsidising where you live is NOT reasonable.

Most but not all. There's nothing wrong with thinking differently. Reading some of the comments and you'd think I committed a crime.

P.S. I have been a contractor in the past both on my own and working via an employment agency. The expenses one can claim are very generous. The hourly rate is almost 50% more than what one can can get on a salary and in one case it was more than double. That was a good year and half.

Hoping I can do similar as I start winding down towards rerirement.

 

[Pushka]

Most but not all. There's nothing wrong with thinking differently. Reading some of the comments and you'd think I committed a crime.

P.S. I have been a contractor in the past both on my own and working via an employment agency. The expenses one can claim are very generous. The hourly rate is almost 50% more than what one can can get on a salary and in one case it was more than double. That was a good year and half.

Hoping I can do similar as I start winding down towards rerirement.

Being a contractor is a good way of winding up to retirement. But the benefits you speak of are only those you expend in earning that amount. No sick leave. If you are ill there is no pay. If you go away on holidays there is no money coming in but likely the expenses will remain (eg telephone costs and internet plans as an example). You will need Insurance for PI. There will be Book work. There may be GST returns. You won’t be getting super assuming you satisfy the contractor clause. It ain’t all roses.

 

[sjk]

I have been a contractor in the past both on my own and working via an employment agency. The expenses one can claim are very generous. The hourly rate is almost 50% more than what one can can get on a salary and in one case it was more than double. That was a good year and half.

Hoping I can do similar as I start winding down towards rerirement.

Just be sure to get some good advice, which may not always coincide with what you want to hear.

 

[JohnK]

I really don't think he understand our tax system a great deal, he seems to think that contractors somehow get an unfair advantage by being allowed to claim more expenses then that of a person who is in a similar role but on a salary.

I do understand our tax system. It's inconsistent at best.

Two people sitting side by side, one on salary and one a contractor, working exactly the same days and hours, sick the same number of days and on holiday the same number of days. The salaried employee has super paid by employer the contractor pays their own super.

At the end of the year the contractor is miles in front. I know they are in front because I was a contractor myself and I could earn the same money as a contractor in 3-4 days and have an extra day off. A few on AFF are doing it for exact same reason.

 

[sjk]

I was a contractor myself and I could earn the same money as a contractor in 3-4 days and have an extra day off.

So what advantages did you perceive there to be in not continuing to do so?

 

[JohnK]

So what advantages did you perceive there to be in not continuing to do so?

Contract finished. No work for 18 months. I took a full time job in Brisbane over a 6 month contract in Sydney as I was out of work a long time and in serious financial trouble.

If I had another opportunity right now I'd take a 6-12 month contract.