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WHV and contracting

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  • 11-08-2014 7:01pm
    #1
    Misticles
    Registered Users Posts: 13,746 ✭✭✭✭


    Is it possible to take up contracting work whilst I'm in Australia?

    If so how so I go about being paid? I don't currently contract so I don't have a company setup for me to be invoice from.

    I spoke to a recruiter and he mentioned a payroll company but I'm not sure what would be involved.


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    #2
    aido79
    Registered Users Posts: 5,374 ✭✭✭aido79


    Its a bit like stealing and drink driving..if you don't get caught doing it then you'll get away with it but you're not supposed to do it. It depends whether the company you work is willing to bend the rules too.


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    #3
    Mellor
    Registered Users Posts: 39,336 ✭✭✭✭Mellor


    Misticles wrote: »
    Is it possible to take up contracting work whilst I'm in Australia?

    If so how so I go about being paid? I don't currently contract so I don't have a company setup for me to be invoice from.

    I spoke to a recruiter and he mentioned a payroll company but I'm not sure what would be involved.
    To work as a contractor, you'll need an ABN number.

    https://www.ato.gov.au/Individuals/Working/While-you-are-working/Considering-becoming-a-contractor/
    https://www.ato.gov.au/Business/Registration/Work-out-which-registrations-you-need/All-businesses/Australian-business-number-(ABN)/
    aido79 wrote: »
    Its a bit like stealing and drink driving..if you don't get caught doing it then you'll get away with it but you're not supposed to do it. It depends whether the company you work is willing to bend the rules too.
    What do you mean not supposed to do it. What rules are being bent?
    Some people probably do misuse ABN numbers, but I wasn't aware that there was a rule against them being used correctly (its been a while since I contracted).


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    #4
    aido79
    Registered Users Posts: 5,374 ✭✭✭aido79


    Sorry ignore what I said. I was thinking of something else:)


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    #5
    Misticles
    Registered Users Posts: 13,746 ✭✭✭✭Misticles


    Mellor wrote: »
    To work as a contractor, you'll need an ABN number.

    https://www.ato.gov.au/Individuals/Working/While-you-are-working/Considering-becoming-a-contractor/
    https://www.ato.gov.au/Business/Registration/Work-out-which-registrations-you-need/All-businesses/Australian-business-number-(ABN)/


    What do you mean not supposed to do it. What rules are being bent?
    Some people probably do misuse ABN numbers, but I wasn't aware that there was a rule against them being used correctly (its been a while since I contracted).


    So do I have to start my own business before I go so I can get the abn? I'm completely new to this and have no clue what is involved in doing this contracting lark.


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    #6
    AngryHippie
    Registered Users Posts: 2,625 ✭✭✭AngryHippie


    Registering an ABN is effectively starting your own business.

    GST registration is a different thing, and it probably wont be necessary for a WHV duration. (2 tax returns max, probably 8 BAS returns)

    Find a decent accountant, will be worth the fees (can be claimed back)

    Watch out for "Sham contracting" in construction.

    (It is being engaged as a subcontractor for the same work that you could, would or did perform as an employee.)

    It's not that difficult to set up, or to run over here, but on a whv duration, there isn't that much benefit once insurance and tax are paid, you basically put in extra time to administer your own work, and won't get paid for it.


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    #7
    Misticles
    Registered Users Posts: 13,746 ✭✭✭✭Misticles


    AngryHippie wrote: »
    Registering an ABN is effectively starting your own business.

    GST registration is a different thing, and it probably wont be necessary for a WHV duration. (2 tax returns max, probably 8 BAS returns)

    Find a decent accountant, will be worth the fees (can be claimed back)

    Watch out for "Sham contracting" in construction.

    (It is being engaged as a subcontractor for the same work that you could, would or did perform as an employee.)

    It's not that difficult to set up, or to run over here, but on a whv duration, there isn't that much benefit once insurance and tax are paid, you basically put in extra time to administer your own work, and won't get paid for it.

    I'm no exploring the idea of using an umbrella company. I'll essentially be hired by then and they will look after invoicing etc


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    #8
    AngryHippie
    Registered Users Posts: 2,625 ✭✭✭AngryHippie


    You'll still have to sort out your own insurance and tax.

    What industry ?


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    #9
    Misticles
    Registered Users Posts: 13,746 ✭✭✭✭Misticles


    AngryHippie wrote: »
    You'll still have to sort out your own insurance and tax.

    What industry ?

    IT- I'm a business analyst for a trading system.


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    #10
    Feelgood
    Registered Users Posts: 2,191 ✭✭✭Feelgood


    IT contracting has a different setup to contracting with a trade. You can go with ABN setup as mentioned, find an accountant and all that ****e, but its way too much hassle for what you want to do and not required. Especially for a few months on a WHV.

    Most IT recruiters offer payroll services, basically you become a PAYG (similar to PAYE in Ireland) employee of the recruitment company. The recruiter will then handle all your taxes and workers liability insurance etc. Obviously they will take a higher percentage of your daily or hourly contracting rate to do this.

    If becoming a PAYG employee of the recruitment company is not an option, you can look for payroll services elsewhere. Again these companies take a cut of your rate and look after all insurance, tax and accounting for you. It is exactly the same as Ireland.

    There is an Irish company called CXC in Cork that offer this service. I have dealt with them at home at they are 100%. They seem to have the same service here in Australia, but I can't vouch for them here.

    http://www.cxcglobal.com.au/

    This basically takes out all the hassle of setting up companies and finding accountants and all that jazz. If you were here for longer, it might be beneficial to set up your own ABN, but I wouldn't bother on a WHV.


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    #11
    jamesdiver
    Registered Users Posts: 372 ✭✭jamesdiver


    How does contracting and the 6month employer rule work? Say for example, you contract for one particular company, are you still limited to 6 months regardless of not being employed by them?

    Second question, can anyone recommend a good tax accountant that specialises in oil & gas offshore work, or should I just use H&R block?

    Thanks


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    #12
    irishmover
    Registered Users Posts: 4,746 ✭✭✭irishmover


    jamesdiver wrote: »
    How does contracting and the 6month employer rule work? Say for example, you contract for one particular company, are you still limited to 6 months regardless of not being employed by them?

    Interested in knowing this too.

    Girlfriend is working for a super company but is contracted out and paid by a recruitment agent. Her 6 months with them ends in November. The super company will want to keep her on and most likely offer her a new contract. As she's paid by the recruitment agent, all her PAYG info is the recruitment agent, can she just go work for the super company directly, do the same job as she has been doing but be able to work for another 6 months with them and it be legal?

    Starting the process of a partner visa but most likely won't have it until February/March/April.


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    #13
    Mellor
    Registered Users Posts: 39,336 ✭✭✭✭Mellor


    jamesdiver wrote: »
    How does contracting and the 6month employer rule work? Say for example, you contract for one particular company, are you still limited to 6 months regardless of not being employed by them?
    Still bound by the 6 months rule.
    The "employer" is considered who ever you are working for directly, whether or not you are employed by them doesn't matter.

    irishmover wrote: »
    Girlfriend is working for a super company but is contracted out and paid by a recruitment agent. Her 6 months with them ends in November. The super company will want to keep her on and most likely offer her a new contract. As she's paid by the recruitment agent, all her PAYG info is the recruitment agent, can she just go work for the super company directly, do the same job as she has been doing but be able to work for another 6 months with them and it be legal?
    No. It's 6 months working for that company, regardless of employment arrangements.
    Also, recruitment companies don't like to lose their slice of the pie, so often have clauses in place to prevent companies from simply signing their staff directly.


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    #14
    irishmover
    Registered Users Posts: 4,746 ✭✭✭irishmover


    Mellor wrote: »
    Still bound by the 6 months rule.
    The "employer" is considered who ever you are working for directly, whether or not you are employed by them doesn't matter.



    No. It's 6 months working for that company, regardless of employment arrangements.
    Also, recruitment companies don't like to lose their slice of the pie, so often have clauses in place to prevent companies from simply signing their staff directly.

    Yeh I figured the first bit, suspected it would be whoever you're working for.

    There's no clause like that between these two. It was confirmed by half the people who work for the super company as permanent staff having joined via temp work with the same recruitment agency. Place is like a revolving door!

    It's a ****e job anyway but she didn't mind doing it. Have been getting stuff together for the partner visa so will probably start looking into that before christmas. Second visa runs out for her June 1st. Might come across a better job on a PR visa anyway.


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    #15
    ArseBurger
    Registered Users Posts: 647 ✭✭✭ArseBurger


    Mellor wrote: »
    Also, recruitment companies don't like to lose their slice of the pie, so often have clauses in place to prevent companies from simply signing their staff directly.

    Not to prevent. There is usually a buy out clause. The crowd I use charges 15% of annual.


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    #16
    Mellor
    Registered Users Posts: 39,336 ✭✭✭✭Mellor


    ArseBurger wrote: »
    Not to prevent. There is usually a buy out clause. The crowd I use charges 15% of annual.
    Sorry yeah, they are usually more than happy to work with a buy out clause.
    I just meant its not as simple as signing up directly.


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    #17
    ArseBurger
    Registered Users Posts: 647 ✭✭✭ArseBurger


    Yeah. A few of them have multiple trading companies and shift WHV people between them. They're the dodgy ones generally though. For both hiring practices and dealing with.


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    #18
    hussey
    Registered Users Posts: 6,240 ✭✭✭hussey


    What are the advantages of having an ABN?
    I about to start contracting - should I have an ABN rather than use a payroll company?
    any tax benefits?


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    #19
    Feelgood
    Registered Users Posts: 2,191 ✭✭✭Feelgood


    hussey wrote: »
    What are the advantages of having an ABN?
    I about to start contracting - should I have an ABN rather than use a payroll company?
    any tax benefits?

    If you register your ABN to your home (office) address then you can claim back a number of business expenses. Around 25% of your rent, electricity and gas.

    You can also claim back travel expenses, a percentage of phone and internet usages, stationary, office furniture, computer equipment etc.

    Note, if you go with a payroll company you can still claim back these expenses. I'd recommend going with a payroll company, they can advise you properly on Australian tax laws and requirements. They will be able to tell you exactly what to claim and what not to claim. It will also take the hassle out of looking after your own tax and insurance. You can also write off the payroll companies fees as a business expense.


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    #20
    jamesdiver
    Registered Users Posts: 372 ✭✭jamesdiver


    I got my ABN last week. HR Block said I couldn't file my return without it as I am a contractor. It was a piece of piss online application which instantly generated the number. You need to go through questions which determines if you are eligible to get the ABN. Don't bother paying a 3rd party company for the ABN, do it yourself for free.


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