Simple question regarding invoices and tax

The best sub for this might be /r/ausfinance although keep in mind they can only provide general information, not specific advice.

A bit of terminology that might help you in your research: If you want to offer personal services as a contractor, or operate other types of businesses, you normally require an Australian Business Number (ABN). This simplest setup is a "sole proprietor." This means the ABN is directly linked to your personal TFN (tax file number). In this case, taxes from your business or personal services income are combined with your normal personal income. This is the simplest way to do things, although it doesn't shield your business from personal liability. So if the business starts getting larger and you start investing money into it, you would want to consider incorporating. However for contract services where there is no real investment and not much income outside personal services, a personal ABN is common (I have one myself).

If you just have personal services income it's pretty simple as the tax rate is just against the entire amount of the income, and it's taxed at the same, normal personal income tax rates. However if you want to operate a more complex business where you want tax to be only calculated on your profit from buying and selling goods, for example (instead of against your entire income/revenue), then it becomes more complicated (and outside my experience).

Here are a couple of links you might want to read: http://www.business.gov.au/business-topics/business-structures-and-types/independent-contractors/Pages/default.aspx

https://www.ato.gov.au/Business/Starting-and-running-your-small-business/

You don't need to worry about GST until your revenue reaches $75,000 per year (on activities that would be GST eligible). https://www.ato.gov.au/Business/Starting-and-running-your-small-business/Running-your-business/Goods-and-services-tax-%28GST%29/ . That's the good news in the short term you can ignore GST.

/r/sydney Thread