Hey guys I wonder if someone could help here?

If I apply for a ABN number and work for just a couple of weeks is it possible to pay the GST at the end of financial year (tax time) or should I take the gst out of my hourly rate?

I have a understanding that only if you think you will earn over 75k you need to apply for GST registration form?

Any help will be much appreciated.

Ring an accountant he would give you the best advice. Also if you earn under a certain amount you dont have to pay GST (this means you cant collect it) also means you dont have to be registered. Be careful though as soon as you go over the earning limit you will be forced to pay gst on the full amount. Also dont take the gst "out" of your hourly rate add it on top of it because watever you collect on behalf of the tax man you will have to pay unless you offset it on materials or other purchases. RING AN ACCOUNTANT.

southace said...

Hey guys I wonder if someone could help here?

If I apply for a ABN number and work for just a couple of weeks is it possible to pay the GST at the end of financial year (tax time) or should I take the gst out of my hourly rate?

I have a understanding that only if you think you will earn over 75k you need to apply for GST registration form?

Any help will be much appreciated.

Provided your turnover is less that 75k or whatever the cureent limit is, you don't have to take anything out of your hourly rate. You can charge exactly the same rate as you charged when you added GST if you want. It's your business so you can charge whatever you like.
HOWEVER,..
You cannot add, say or write anything on your invoice which says "Plus GST" or "Including GST" . There can be nothing either said or written which implies that GST is included in the charge and that the recipent can claim a GST credit on that charge.
Some businesses do not like dealing with non GST registered entities because it makes their accounting messy.

{edit} I might just add this, in case it helps.
If you're doing something like mowing lawns for the general public, you are better off not registering for GST.
For instance;
If you are registerd for GST,
Say your houly rate is 20 an hour plus GST to make the total charge 22 an hour, the total charge to Joe Public is 22 an hour and he gets nothing back from the government. Joe Public cannot claim back the GST you charged on his BAS return because he doesn't do a BAS return.

If you're not registerd for GST,
Your hourly rate can be 22 an hour and Joe Public still pays the same rate and he still can't get anything back from the government.
So Joe Public couldn't care less if you are registerd or not. He still pays the same out of his pocket and he still gets nothing back from the government.

But, if you're mowing lawns for BHP, then they can normally claim back the $2 an hour GST so they will care whether or not you are registerd for GST and they will give the job to someone who is registerd so they can claim back 10% of the invoice value on their BAS return.

Be aware though that if you spend a fortune on lawn mowers or other supplies and are not registerd for GST, you cannot claim back any of the GST you paid on your lawn mowers or other tools of trade. If the tools of trade have minimal value, say pencils and paper then this factor is not relevant.

(for all this good advice, my invoice to you is now in the mail,.. plus GST. )

Even if you are not registered for GST, you can still claim for all business expenses on your tax return, including the GST, as a deduction on your income. Your tax return and the BAS return (business activity statement) are two completely separate returns.
You can still claim for depreciation on business equipment and everything else considered a normal business expense, whether you are registerd for GST or not.
What you cant do is claim 100 percent of the GST component back off the government, which you CAN do if you are registerd for GST.

It works like this; again, say mowing lawns and registered for GST.

Your GST account is calculated each month or quarter or yearly, depending on how you want to do it, unless you make millions in which case it has to be done monthly. Most small business chooses to submit it once a year. Less paperwork.

You cut 1000 lawns for $50 each plus GST of $5 on each job. Makes a total of $50,000 plus a total of $5000 GST.
If you bought nothing for your business that year you would just submit your annual BAS return and pay the $5000 you charged your customers for GST.
So you owe the gov. $5000.

However, there will certainly be expenses which the business incurred on which GST was paid. Say petrol, new lawnmower, new trailer, new ute to tow the trailer (used entirely for business) etc. Say the total of GST paid out is $6000, then you include that 6000 paid out in your BAS return. It means the gov owes you 6000.
So you owe the gov 5000 and the gov owes you 6000. You get back $1000.

If your expenses were low that year and the GST paid by you only totals 1000, then owe the gov. 5000 and they owe you 1000. You will have to send the gov. $4000.

So whether you register for GST or not really depends if you think you can regularly claim more GST back than the gov can claim off you.
Mostly the government is a bit like a casino. You might have a win now and then but mostly the house is in front. Way in front. So unless you have to register for some reason I wouldn't bother.