Tax obligation for Self-employed Contractor/Independent contractor in Australia

As a self-employed contractor, you're running your own business. You need an ABN, and you need to pay tax and the superannuation. You're not entitled to paid leaves, and you may have to pay the cost to fix any damage caused by you. You can be a self-employed, or working for your company or a trust. Knowing your tax obligations from the start can save you time, money and stress.

There are specific rules for independent contracts to ensure that you do not use business structures to avoid your income tax obligations. It is important to discuss with your accountant, contracting consultant or the government Taxation Office to ensure you understand your tax obligations. If you’re a sole trader or a partner in a business, you don’t have to make super contributions to a fund for yourself. Your super fund can accept personal contributions from you if it has your TFN.

Tax File Number (TFN)

A tax file number is unique. Issued by the ATO, use to administer the tax. If you are operating as a sole trader, you use your individual tax file number. And if you’re in a partnership or registered company you will need to apply for separate tax file number.

Australian Business Number (ABN)

Independent contractors Australia needs to have an Australia business number to use when dealing with other business. If you don’t have Australia business number before taking work, your hirer may legally hold the Medicare from your payment.

Goods and Services Tax (GST)

If you are the independent contractor you need to register for goods and services tax. It is applied to most goods and services sold in Australia. So it’s like your services to Goods and services.

Australia Business Explained

An Australia Business Number explains when you register with the Australia Business Register. The Australia business number is unique 11 digit number that identifies your business to the government and community.

ABN for Business

If you are running your own business, then you need an Australia business number.

Register for the ABN.

•          Register for goods and services and your business name
•          Get an AVS keys to transact online with government agencies

 Benefits for business

•     Government use Australia business number information to build an understanding of business demographics in your local area.
•        This help to guide services delivery, plan and manage infrastructure and provide recovery for you and your community.
•     Pay tax on time, and it will help for business as contractor compliance and also help the government.