There are also issues of liability and superannuation.
I wouldn't subcontract without public liability insurance in place and I wouldn't hire a subcontractor without it.
Worker's comp too.
Yes. If you sub-contract you need to pay your own super.
Public liability is in case some loser decides that their stupidity is your fault and sues you. Don't assume that because you are honest and competent you won't be sued. People have sued cafes for serving them coffee that is hot
You need to pay your own insurance, super, public liability, etc. You also need to register for GST if you earn above a certain amount and there is a heap of paperwork. It's a nightmare TBH but you earn more than as an employee, especially if you have a good accountant.
Actually that's the best start. Get a good accountant and discuss it.
Depending on what you do you can go through a contracting house (very common in IT) so they sort all the insurance etc, work out your pay etc all for a small fee and then there really isn't anything else to do on your part. When I have contracted a couple of times and DH too we have both done that because wasn't worth the hassle for the short-term contracts we were doing.
This will be carpentry. Dh boss has been doing it for 30 years and he suggested that DH eventually go out on his own. I think that by DH sub-contracting that is where it will start? I am not sure. His boss is very happy with DH work and would pass on clients etc. But it wouldn't be for at least 12 months or so.
I'm just scared because I know nothing about all of this, neither does DH. We are just going by what his boss is suggesting.
My DH was a subcontractor carpenter before Fairwork Australia cracked down on it. He was then put on wages. You have to pay your own tax, super and public liability insurance. I know in SA they cracked down on subcontractors working for one employer. A lot of guys and employers got in trouble and had to be put on wages. Not too sure if its all states but in SA you can only be a subcontractor if you have multiple employees per week. Basically jumping from work site to work site as fill ins. You get paid more money per hour and can claim a lot more. Eg. Car usage, mobile phone, tools. As a sub contractor over here your expected to have all your own tools. I assume your DH has all his licences. I think he has to get one where he can work unsupervised and can be a supervisor, especially if he is to go out on his own one day. To go out on his own is pretty hard financially. Over here to get a licence to be on your own you have to have something like $200K in capital or assets just to be able to build single level dwellings. My DH couldn't get that licence to go on his own and build houses as we dont have that much capital. Our business now is gardening and home property maintenance. He can under his licence put up stud walls, roofing, verandahs etc but cant build a home on his own. I dont know what Victorias requirements are for licences and things. You can google it. The licence DH needed to run our business cost over $600 and he had to go and sit in front of the board in Adelaide to get it. Just google what you need and how much it costs for a starting point. I know when DH was a subcontractor carpenter it was a lot harder to get loans and stuff as basically your self employed. It has its ups and downs. Ups is more money, more to claim so usually a bit less tax to pay. The downs are the endless paperwork, can be expensive getting your tax done, lodging a BAS each quarter, not spending the GST you collect and being self employed (no holiday or sick pay). I am an office administrator so could do all his book work for him and used MYOB so it was pretty easy come tax time. Hope this helps and doesn't scare you off
My DH has been a subbie for 9 years and the money is good, but the paperwork is the main drawback. Also no sick leave, no paid holidays, no super, etc. You have to budget for these things from the increased pay but it doesn't always work and DH generally takes 2 weeks off a year at Christmas. Hopefully now that I have a job we will be able to take the occasional other holidays because he is so overworked.
Also when work is low (as it usually is in January) then he gets paid less as he can only earn when he works. So although it's a bit like a holiday, it comes straight after Christmas when he has already taken 2 weeks off unpaid so this time of year is always difficult.
He will also need to buy and maintain his own tools, ute or van, etc. But the benefit is all these things are tax deductible and a good accountant (as I said above) can make the difference between it working and not.
Vic, i will look into the licenses. It does sound like a lot of work It wouldn't be happening for at least 12 months anyway, but it's good to know what we are looking at. I was thinking about doind a course MYOB or something. whatever I need to gain more experience in that area.
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Tell me about sub-contracting
It wouldn't be happening for at least 12 months anyway, but it's good to know what we are looking at. I was thinking about doind a course MYOB or something. whatever I need to gain more experience in that area.
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