Independent contractors are self-employed people who control what work they do and how it is done. Since they are not employees no tax or PAYE is deducted, however they may be subject to schedular payments.
It is also important to note that you can be self-employed in one line of work and still work in another job as an employee. For most people they might have a full-time job as an employee and have a part time (side-job) work where they are self-employed.
Self-Employed/Independent Contractors & Locums are responsible for meeting their own tax obligations.
If as a Self-Employed/Independent Contractors or Locum you are earning more than $60,000 per year you are required to register for GST.
In some situations, even if you are earning less than $60,000 you might be required to register for GST, for example in cases where you are paid GST under a contract.
Income Tax Returns
You have to file IR3 income tax returns at the end of the financial year. It is advisable to take professional assistance when doing this.
Some of the problems we see when you file your own tax returns are:
- Not claiming all expenses
- Not declaring all income or declaring income in incorrect periods
- Claiming private expenditure, note you can still claim home office expenses
If you are unsure what to do, contact us today for a free no obligation conversation.