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Here follow two scenarios of an Australian and a non-resident working at a rate of $40.00 as a normal PAYE employee versus working through a managed composite company.
Scenario 1
Comparison of an Australian candidate who receives $40.00 per hour and works 46 weeks per annum with average expenses and a $25,000 motor vehicle.
As a self-employed person the temp/contractor can reduce their taxable income through justifiable business expenses and allowances, made up of, for example:
- FBT
- Paid car allowance
- Super Telephone
- Mobile
- Income Protection Insurance
- Consumables
- Stationery
- Postage
- Self-education
- Subs and Books
- Accounting fees etc
see Samples
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PAYE |
Managed Company |
Gross Weekly Wage |
$1,600 |
$1,600 |
(paid as wage,expenses &
living allow.) |
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|
Less Tax & Super |
$563 p.w. |
$446 p.w. |
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|
|
Total Earnings |
$1,037 |
$1,159 net benefit |
Tax Rate |
27.76% |
18.67% |
There are several ways to achieve a personal wealth plan to suit your needs, which can be discussed with outside advisers.
Scenario 2
An international contractor non-resident receives $40 per hour. Again, as a self employed person the temp/contractor could make justifiable business expenses, made up of for example:
- Travel to Home Country annually
- Self Education Subs and Books
- Income Protection Insurance
- Telephone & Mobile
- Consumables/Stationery/Postage
- Accounting Fees etc ...
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PAYE |
Managed Company |
Gross Weekly Wage |
$1,600 |
$1,600 |
(paid as wage, exp & living allow.) |
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less Tax & Super |
$637 p.w. |
$324 p.w. |
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|
Cash in Hand |
$963 |
$1,276 |
Tax Rate |
32.41% |
11.55% |
Note: Superannuation has been accounted for in these examples.
These savings are all net of the management fee charged, ie. No more to pay!
THIS IS A GENERAL SCENARIO. To find out what your best position is contact us.
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