Hey I was thinking, if my employer gave me my full salary and I stuck the tax portion in a high interest account it would add up to a fair bit year after year.
Is this possible? If your company is a PAYG company can you ask your employer to just give you your full salary? |
No you can't do what you said. It's compulsory if you're PAYG worker for your employer to with held your PAYG tax.
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Goddam, that is really lame. Only if you want to be a tax cheat. Otherwise put yourself as contractor then you can get your entire pay. But then you don't get sick leave etc and then you still have to do PAYG quarterly + higher tax rate. So no it's not lame really. |
Goddam, that is really lame. No, it's good. Can you imagine trying to get money back off actual employees!? It would be like tax returns only much worse. |
i dunno about the answers in this thread.
what i do know, a guy i worked with who had many investments received all of his salary, paid no tax. put all of his money in his investment repayments and at the end of the financial year paid it all off 1 lump sum. and he was an hourly wage worker for one of australias big company's |
i dunno about the answers in this thread. He wasn't an employee then. You can be a contractor paid by the hour (most of them are). Also if he paid his tax annually then the ATO will now be demanding quarterly PAYG installmentds based on the last return. Trust me on this :) I think its a newish thing they are doing though. |
IAS N - Annual instalment activity statement This sample document is for taxpayers who have elected to report and pay an annual PAYG income tax instalment. NAT 4648 http://www.ato.gov.au/content.asp?doc=/content/25186.htm&m=0 maybe its this one.. i dunno, i'm not a financial advisor He wasn't an employee then. You can be a contractor paid by the hour (most of them are). no he was/is employed under an EBA like me. he faxed off a form to our payroll and they withheld 0 tax. last edited by cainer at 12:31:06 07/Jul/10 |
IAS N - Annual instalment activity statement This sample document is for taxpayers who have elected to report and pay an annual PAYG income tax instalment. NAT 4648http://www.ato.gov.au/content.asp?doc=/content/25186.htm&m=0 That's not for employees. Employers must withold tax for employees. Its L.A.W. law. He wasn't an employee then. You can be a contractor paid by the hour (most of them are).no he was/is employed under an EBA like me. he faxed off a form to our payroll and they withheld 0 tax.last edited by cainer at 12:31:06 07/Jul/10 I don't know the details of his EBA. Was he paid super? Maybe they were breaking the law? My accountant tells me that PAYG is compulsory for all employees - I actually asked him about it last time we met because I didn't want to calculate payroll, the answer was to shift them to contracting if I didn't want to do payroll. |
I'm an employer, yes PAYGW is law.
Not only is it law, they are right on top of it and ride your arse if you do not comply with the dates and fines are implied on your company just a like parking tickets. You must pay quarterly unless you withhold over $25k PAYGW in which case you pay monthly. |
what if your employee estimates his tax writeoffs to be 100% of his tax payments (like this guy in question did) ?
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IAS N - Annual instalment activity statement This sample document is for taxpayers who have elected to report and pay an annual PAYG income tax instalment. NAT 4648http://www.ato.gov.au/content.asp?doc=/content/25186.htm&m=0 Then your understanding for his situation is wrong. He's either a contractor of some types or have set himself up as some sort of sub-contractor to a company he owned for this to happen. That or he's cheating the system without your company knowing about it either way PAYG is still compulsory - even if you're a contractor. It's how you pay and the rate it is where differences are. You know what they say about death and taxes :) |
what if your employee estimates his tax writeoffs to be 100% of his tax payments (like this guy in question did) ? I don't think that's how it works, and sounds rather illegal in any case. How can you write off such that you owe no tax? Your costs would make going to work pointless, right? You just don't f*** with the tax man on s*** like this. The penalties under Part IVA for evasion are truly epic. If you're an employee you must PAYG. If you're not then you'll probably have to PAYG eventually anyway. |
Hi, not only am I an employer I'm also the bookkeeper.
In the bookkeeping software the 'large employer' would have used in simple terms there are only two ways to pay an entity - payroll or payment of an invoice (which may or may not have GST applied depending on whether the entity is registered to collect GST or whether the purchased item attracts GST). If you use payroll then PAYGW is automatically calculated based on the current year tax tables. It calculates all these things listed automatically and trust Hoggy when he says that you don't f*** with this s*** because the fines are immense. If you are paying an invoice then you require an invoice. The invoice has specific text on it, but the key features are the ABN of the entity as well as the words "INVOICE" (if it attracts no GST) or "TAX INVOICE" if it attracts GST. I would suggest the person you know was invoicing the company at regular periods. |
PAYG is mandatory. There are penalty provisions to the taxpayer and employee. If you want to pay me by the billable hour I'll provide you all the citations needed.
End of thread. |
what if your employee estimates his tax writeoffs to be 100% of his tax payments (like this guy in question did) ? Then he'd still pay tax but get it back at the end of the year. Like most of us do, but we can't generally write off 100% of our tax. |
haha and i've got budgets to meet so i don't have time to ply my trade for free.
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Contractor + family trust = laugh all the way to the bank!
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Yeah the old trick was something like. XYZ Pty Ltd as trustee of ABC Family Trust (discretionary) Dad, Mum and little Johnnie as beneficaries MNO Pty Ltd as a beneficary XYZ pays 30% tax Dad, Mum and Little Johnnie get distributions up to the medium tax rate MNO Pty Ltd gets the rest who then loans back to XYZ - no tax paid on this part. However High Court in Bamford (April 2010) redefined income for trust purposes and effectively made a murky area of revenue law murkier. |
Create a second (or third) identity. Divide the hours you do amongst yourselves. Pay less tax because of thresholds, etc. I can't recommend this, as I'm sure whoever does this will be reamed in the arse by the ATO and the pain they feel will be multiplied by the quantity of a*******s that they claim to have. :) |
I had the same dream as the OP once, it was not to be for the mentioned reasons.
It's kind of annoying because I'm usually paying too much tax and have to wait a year to get it back, and being a frugal tightass I would have made those thousands work for me in interest, which could then be taxed more. ^_^ I was told it's because people can't be expected to be able to retain the money to pay their tax at the end of the financial year. If that's the case then I feel like I'm being dragged down for other people's terribleness. |
Basically. Everyone else is a s***c*** who have no discipline to save so the ATO would end up bankrupting people.
Personally, I have no problem with that method. Maybe if people acquired saving discipline for tax, it may port across into their other financial habits. |
I'm still missing why anyone wants to do what the OP wants - other than to make a 'quick' buck without the Govt taking any (which they would if it was allowed - the interest earned would also be taxable, and probably heavily).
Invest in a more aggressive portfolio. Salary sacrifice a higher %age for your super contributions. Get another (or better paying) job. Work more hours. That's how you get rich. Can't wait for the upcoming Penn and Teller Bulls***! episode about Easy Money... |
Some people operate on margins where those small amounts are big deals in regards to their total wealth. That being said you're probably right, better to chase ways to make more money instead of ways to stretch out what you've gone.
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Invest in a more aggressive portfolio. Salary sacrifice a higher %age for your super contributions. Get another (or better paying) job. Work more hours. That's how you get more money. You don't really get rich imo working harder, you get rich making other people work harder. Capital is the means of production. Getting rich in a capitalist society involves controlling production. Investing on the share market is just buying production. |