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Frank Oz

PAYG...Sole Traders...Super...

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I'm moving to Australia and trying to figure out whether it would be more financially beneficial for me to set up as a self employed sole trader or operate on short term PAYG contracts. I wonder if anyone can shed any light on this...

 

In the UK I am a self employed sole trader who provides professional services in the media industry. When I submit my final invoice to a client I also add on roughly 11% for any paid holiday entitlement I'm due if I didn't use it up over the course of the contract (which I never do as there's never time to take a day off).

 

Questions:

1) As a self employed sole trader in Australia is it normal to be paid holiday entitlement - or a specific percentage to cover other fringe benefits such as superannuation - on top of your regular invoice amount/rate?

2) Does the super guarantee percentage (currently 10% I think) apply to all PAYG workers? So am I correct in thinking 10% would be paid into your super account on top of your monthly salary?

3) Is there a national insurance equivalent in Australia or is it all rolled up into one single income tax?

 

Thanks!

Edited by Frank Oz

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As a sole trader, you are not an employee of your client, so your client does not owe you any employee benefits. You charge an hourly rate and that’s that. 

If you are an employee, then you get super. Whether it’s on top of your salary or not depends on the wording. If it says “salary package” then the figure includes super, for instance. 

No there is no NI.

Edited by Marisawright

Scot by birth, emigrated 1985 | Aussie husband applied UK spouse visa Jan 2015, granted March 2015, moved to UK May 2015 | Returned to Oz June 2016

"The stranger who comes home does not make himself at home but makes home itself strange." -- Rainer Maria Rilke

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9 hours ago, Frank Oz said:

1) As a self employed sole trader in Australia is it normal to be paid holiday entitlement - or a specific percentage to cover other fringe benefits such as superannuation - on top of your regular invoice amount/rate?

Fringe benefits has a specific meaning in Australia, along with a hefty tax.  Superannuation is not a fringe benefit here.  


Any fool can criticize, condemn, and complain but it takes character and self control to be understanding and forgiving.

Dale Carnegie – 1888-1955, Author and Lecturer

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On 21/07/2021 at 07:56, Marisawright said:

As a sole trader, you are not an employee of your client, so your client does not owe you any employee benefits. You charge an hourly rate and that’s that. 

If you are an employee, then you get super. Whether it’s on top of your salary or not depends on the wording. If it says “salary package” then the figure includes super, for instance. 

No there is no NI.

Actually businesses are required to pay Super (and Payroll tax if over the threshold) for Sole Trader contractors - although many dodge the requirement and sole traders are rarely in a position to enforce their right to Super if they want to keep on working for that business.

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Chartered Accountant (England & Wales); Registered Tax Agent & Fellow of The Tax Institute (Australia)

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