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Renting Out Part of your Home

Renting Out Part of your Home

With the landscape of the world-changing, to gain an extra dollar, landlords have become more common. As many people decide renting out rooms in their own home while still living there. This can have many benefits including paying the mortgage, covering running expenses. And even filling up space that was anyway unused. In exchange for leasing out a room or part of your home, you will receive rent. This rent is treated as “assessable income” by the ATO. And is required to be reported in your annual tax return.

When you lease out part of your home, you will receive payment in the form of rent from the tenant. This money received is income. And will need to be reported on your tax return. So it is important to keep a spreadsheet of all income received between 1st July and 30th June each Financial Year. However, this does not mean you cannot claim any deductions against this income. To reduce your taxable income and perhaps boost your refund. Below are the deductions you can claim.

Firstly, you should always look to keep a good, steady habit for keeping receipts and records. We at R T Accounting & Taxation Services are on hand to ensure that you keep good recording habits throughout the year. It is not very complicated. Just need to keep a file of receipts and/or an excel file about any expenses or costs in relation to the rental of your property. Along with the income mentioned previously.

This record will be useful for us at tax time. As we will be able to capture all income and costs seamlessly. Which can help you reduce your tax bill and get more in your pocket. Remember it is wise to keep your receipts, so ensure to keep all receipts. Even if you are in doubt as to whether they are a deductible expense. That is what we are here for. To guide you and help you reduce your tax payable as much as possible within the means of the law.

Apportion

The Apportion method is the simplest way of deducing any tax deductions with the rental of part of your property. This method requires a simple calculation of the floor space of your home leased out to a tenant. And a reasonable percentage allowed for shared common areas such as a shared bathroom, living room, dining room, kitchen, etc. For example, if you were living alone in a 2-bedroom, 1 bathroom apartment, an appropriate apportionment would be 50% shared expenses. And each person has 1 bedroom and other amenities are then shared.

It is also common for the tenant to pay for part of the running costs. Such as electricity, water, internet, etc. on a weekly or monthly basis. We will need to report this as rental income. However, we can then claim back these payments as expenses, rendering it to a nil effect. 

Example

Tom owns a 2-bedroom apartment. He decides that since one of the rooms is empty and the apartment is located near a university, that renting out the other bedroom is a logical move. A student moves in and pays $150 a week on a year’s contract. The floor area of the rented bedroom is 10m^2, which amounts to 20% of Tom’s 50m^2 apartment unit.

Tom’s expenses include her interest on loan repayments for the mortgage, building insurance, body corporate fees and water. This amounts to approximately $20,000 for the year.

Tom should report $7,800 rental income for renting out the bedroom, as well as 20% of the $20,000 expenses mentioned previously, amounting to $4,000. Tom should also keep all receipts and records of expenses incurred during the year, which will make our job at tax time a much smoother process.

Deductions Claimable

Generally, any expenses incurred in running the home is claimable.

Common deductions include:

  • Internet costs
  • Home landline costs
  • Water, electricity, and council rates
  • Repairs and maintenance 
  • Depreciation on the cost of furnishings and equipment
    • E.g., furnishing the spare bedroom with an actual bed and linen. This cost is tax deductible.
  • Interest on loan repayments for your mortgage
  • If living in an apartment block, any Body Corporate Fees 

Renting Out a Room to Family & Friends

Sometimes, your family or friends could be in a bad situation in that they might need a place to stay. This can come with a red herring, as the ATO assumes you are making the most of your property’s rental investment potential. If you are intentionally receiving less than market rent, ATO requires you to apportion your expenses downward in line by the same proportion you have reduced your rent to your friend or family.

For example, if you rent a room to your brother at half market rent, you must divide your apportioned deduction claims by half as well.

Taking our earlier example, if Tom rents the spare room to his brother for $75 a week instead of $150 a week, Tom should report $3,900 as rental income. However, if total yearly expenses amount to $20,000 for the year and 20% of apartment space is taken up by the second room. This would previously mean that we could have reported $4,000 in expenses. However, since Tom is only accepting 50% of market rent from his brother, he must then reduce the $4,000 by 50% as well and can now only claim $2,000 in deductions.

So, please keep this in mind when renting out a room to a family member or friend at a discounted rate.

To calculate the market rate for renting a room, it is a pretty simple process. You can check on domains at other similar properties in the same areas as yours. 

Working out live in landlord tax deductions when renting to family and friends can also be difficult so ensure that you consult us if you are not sure on what you can and can not claim. It is imperative that we get this section correct, as the ATO can go in and amend your returns if they feel something is amiss. 

Are You Liable for Capital Gains Tax?

The law is that if you sell the home that was your own main residence, you are not liable for Capital Gains Tax (CGT) deducted from the sale price. However, the moment you start renting space in your home, it becomes a touch more complicated.

This means, the moment you rent your home out in part to a tenant, you are then no longer entitled to the full “main residence exemption”. What this means is that when you sell the home, you will need to pay some CGT, at the rate that is adjusted based on how much of your house was rented for and for how long.

However, this is a simple process in that all we need to do is calculate a couple of numbers.

  1. Determine the area of the total floor area that is set to produce rental income.
  2. Duration in which you have used this floor area.

Using these two figures you should be able to work out the total days your property was rented out of the total days you owned the property.

Using the previously mentioned example, Tom’s rental space totalled 20% of his home. He owned the property for 5 years and rented out the room for 4 of those years. 

When he sells the property, if he has made a gain, he will need to pay 80% (4years/5 years) of the 20% of the full CGT for the property. This amounts to 16% of the full CGT of the property.

Renting out a spare room can offset some of your household costs and help you pay off your mortgage. In saying that there can be some future downsides, with the big one being the future cost of CGT. Be sure you measure out the pros and cons of renting out a spare room. If in doubt, do not be afraid to get in touch with the tax agents at R T Accounting & Taxation Services who can help guide you through this tricky process.

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Researching before opening a tax account in eastern suburbs is important

Tax Account in Eastern Suburbs: Seven Things You Must Do Before Opening

Paying taxes is a massive responsibility for any citizen. The money we pay in taxes eventually comes back to us in the form of development. So, it’s essential that we pay taxes on time. However, paying taxes is already a complicated process, and not understanding the technicalities can make the process even more complicated. Thus, many people struggle when opening a tax account in eastern suburbs.

Opening a tax account is the first step to paying taxes. However, you need to keep a few things in mind to have a seamless experience when paying taxes. In this article, we’re going to discuss a few things you need to know before you get a tax account in the easter suburbs.

What is a Tax Account is Eastern Suburbs:

A tax account generally refers to the account you use for managing your taxes. From sending your documents, paying the money, lodging your tax returns and receiving the refund, the entire process is done through your tax account.

How to Open a Tax Account is Eastern Suburbs:

Opening a tax account is no challenging task. You can get your tax account running in a few minutes without any hassle. You can use the Australian Taxation Office app to get an account while sitting at home. You can use the app to do everything if you have all the information readily available.

Things to Do Before Opening a Tax Account in Eastern Suburbs:

Opening your tax account is the first step to paying taxes. However, paying taxes is a hard task, and it’s important that you know everything beforehand. Here is a list of a few things you need to know before opening a tax account in eastern suburbs:

Research:

While we can’t stress this enough, you need to research everything before you start paying taxes. There are a lot of factors that you need to know beforehand. These include when you start paying taxes in Australia, how to pay taxes, the legal affairs, the rules and regulations, etc. The more research you do, the more prepared you are for opening your tax account in eastern suburbs.

Most of the necessary information about taxes is available on the internet, check the available resources and keep notes if necessary. The knowledge you manage now will be invaluable in the long run.

Know When to Pay Taxes:

A lot of people don’t know when to start preparing for taxes and when to start paying. As a result, they face fines and penalties for their delay. So, it’s essential to be punctual while paying taxes.

The fiscal year in Australia ends on the 30th of June every year. Then you have a few weeks to prepare the documents, file your taxes and once you know how much money you’re supposed to pay, pay your taxes. 

Find Out How Much You Need to Pay:

While taxes are very technical, you can always estimate how much you need to pay. Every year, the Australian Government reveals the range for a different amount of taxes. Checking that can help you find out how much money you need to pay as taxes against your income. However, there are certain additional factors regarding taxes that you can’t determine only from the range. Having an idea about the range can be very beneficial before opening a tax account in eastern suburbs.

Consult a Tax Accountant:

Whether you’re a service holder or an entrepreneur, a tax accountant can really change the way you pay taxes for good. Tax accountants have years of experience in fields of taxation and tax management. As a result, their knowledge of taxes is priceless.

Your tax accountant can look into your documents and tell you what changes you need to make for your taxes. They’ll help you avoid fines and receive certain deductions and benefits that you might’ve not known about otherwise. So, always visit a tax accountant once you’re eligible to open a tax account in the eastern suburbs.

Know About Deductions: 

Tax deductions are a great way to reduce the amount of taxes you pay. Generally, the Australian government has subsidized specific fields of work where you receive deductions for your work. If you’re in one of those sections, you will receive deductions based on your income. 

Furthermore, there are certain work-related expenses that you can receive tax deductions on. These include work clothes, home office setups, work-related travel, and certain unique factors to your work that you can’t use outside the tour workplace. 

You need to submit documents are proof of your expenses before receiving deductions. So, make sure you preserve records of any work-related expenses that might bring deductions for you!

Calculate your Taxes:

Calculating how much money you need to pay before opening a tax account in eastern suburbs can be very beneficial. You have to pay taxes based on many factors, including your income from work, assets, investments, and liabilities. So, see how much money you make every fiscal year and how much of it is taxable. You need to put this information in your tax account in eastern suburbs, which might help the long run. 

Find Out Whether you Need to File a Tax Return:

You might need to file a tax return in certain scenarios. Especially if you have received tax-deductible income or you have to apply for deductions. Generally, you have to file a tax return once the tax period ends.

Not lodging tax returns in time can cause some trouble in the long run. Make sure you know whether you have to lodge your tax returns or not.

Conclusion:

Taxes are an important part of our life. Once we’re eligible, we have to pay taxes regularly to make sure things work out for the country. Opening a tax account in eastern suburbs is the first step to that responsibility.

In this article, we’ve discussed a few things that you need to do before opening a tax account in eastern suburbs to make life easier for you. We hope you find this article helpful!

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Tax retun in eastern suburbs can be crucial in the long run!

Tax Return in Eastern Suburbs: 6 Cases for Eligibility

Suppose you’re an Australian resident or someone who’s working in Australia for at least a year. In that case, it’s mandatory that you pay taxes. Taxes are an integral part of your working life, and thus you have to pay them regularly. However, in some instances, you might need to lodge a tax return in eastern suburbs for your taxes as well.

Taxes are essential for many reasons; they keep the economy stable and enables the government to take on different plans for their citizens. Thus, taxes are necessary for both the taxpayers and the government. Also, not paying taxes in time is a federal offence that can lead to a fair bit of legal trouble.

You might wonder why you need to lodge a tax return after completing all the painstaking tasks involved with paying taxes? In this article, we’re going to discuss the technicalities and the situations when you’re eligible for tax returns. Let’s begin!

What are Tax Returns in Eastern Suburbs?

tax return is a document that you have to submit to your taxation office after the financial year is over, and you’re done paying taxes. Your tax return should contain all the necessary information about your taxes. These include your income from your workplace, investments, and businesses. You also need to provide details about your assets and the amount of money you’ve paid in the form of taxes. 

Furthermore, if any amount of your income has already been deducted as taxes before tax, or if you’re supposed to receive any amount of deductions on your tax, you need to put that in your list as well. 

After you’ve submitted your list, the taxation authority will look into your documents and give your verdict. Whether you’re eligible for tax deductions or you’ll need to pay additional taxes will be determined after evaluating the tax return you’ve lodged.

However, not everyone has to file a tax return, you’re only supposed to file it under certain situations.

Eligibility for Tax Returns in Eastern Suburbs:

Your eligibility for lodging tax returns in eastern suburbs depends on multiple factors. These include:

Non-Resident Australians:

If you’re not an Australian non-resident, you might have to lodge a tax return for any amount of money you make in Australia. If you’ve any amount of money over 1AUD, you’ll have to lodge a tax return for it. 

However, Suppose your only income source is from interest, investments, and assets. In that case, it’s not mandatory for you to submit a tax return for yourself if the non-resident withholding tax has been withheld already.

However, once you’re eligible to become an Australian resident, you will be able to apply for tax deductions on any tax you pay after lodging your tax returns.

Tax Returns in Eastern Suburbs for Working Holiday Makers:

If you’re working in Australia with the Working Holiday Maker visa, you might also need to lodge a tax return. However, it’s slightly different from other non-resident tax return rules.

If your taxable income is less than $37001AUD, then you won’t have to lodge a tax return for your payments. However, if your taxable income is above that threshold, you have to lodge a tax return for it. 

However, unlike non-residents, you cannot claim deductions on additional taxes when you’re on a working holidaymaker visa.

Australian Residents:

For Australian residents who work in Australia, they will have to lodge a tax return in the eastern suburbs if you make a certain amount of income. If your taxable income was higher than the tax-free threshold, you have to lodge a tax return to the relevant authority. 

However, we recommend that you consult a tax accountant to understand the technicalities of your taxable income and then decide whether you need to lodge a tax return or not.

Tax Deductible Income:

In some workplaces, you receive your payment after tax has been deducted. In that case, you have to show proof on your tax returns. Any amount of money that has been deducted from your income as tax needs to be shown in your tax returns. Otherwise, you might have to pay more taxes than necessary.

If you’re leaving Australia for at least one year:

If you’re planning to leave Australia for at least a year, you’d need to lodge a tax return of your income beforehand. This is important for receiving your visa to your destination and receiving the necessary clearances. 

So, if you’re planning to leave for any reason, you have to submit your tax returns. However, if you’re still not earning and don’t pay taxes, you might have to submit other necessary documents before departure. These also include other financial documents, so keep that in check as well.

Tax Deductions:

In specific workplaces, you receive tax deductions based on your work. The Australian Government has subsidized multiple sectors, so you might receive tax deductions when you’re working in any of these when you file a tax return in eastern suburbs.

Certain work-related investments, such as home office setup, specialized workplace training, travel, work-related clothes, etc. are considered eligible for tax deductions. However, these are extremely technical and require a great deal of evaluation.

Also, you need to provide adequate proof of your purchases and investments in these fields to be eligible for tax deductions. Suppose you’re eligible for such and have documents to prove it. In that case, you can lodge a tax return in eastern suburbs to get deductions.

Conclusion:

Although paying taxes feels like too much work, it’s important to pay taxes in time. Because of the legal complications that follow are far worse. Furthermore, filing a tax return can give you a plethora of benefits that can help you.

In this article, we’ve discussed the cases for which you’re considered eligible for filing a tax return. We hope you find this helpful!

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Payroll services in eastern suburbs provide some game-changing benefits for your business!

Payroll Services in Eastern Suburbs: Six Key Benefits

When it comes to small businesses, managing everything is an uphill climb. The finances aren’t very steady, and there’s a lot of risks involved. Thus, taking calculated steps is very important in the world of business. Getting payroll services in eastern suburbs might be a game-changer for many people.

If you have employees, keeping them satisfied is an essential part of your business. If your employees are satisfied, they’ll provide more successful outputs. And, unsurprisingly, the key to employee satisfaction is regular payments, and top-notch management of employee payments.

Managing employee payments can be a challenging task. Especially if you don’t have a lot of accountants working for you. And having a payroll system can really be the game-changer for you! 

So, you might wonder whether gettings payroll services is a good idea since you’re already struggling to keep your finances comfortable. Here are a few benefits of getting payroll services in eastern suburbs that can take your business to the next level:

Benefits of Payroll Services in Eastern Suburbs:

Payroll Services in Eastern Suburbs Provide Risk management:

Payroll is a very complicated process, and keeping track of the payments is just as hard. Furthermore, you have to provide accurate descriptions of the amount of money you pay as wages annually during taxes. While providing the information can yield tax deductions, providing inaccurate information can cause more harm than good.

The payroll services you’re using should help you provide the documents. Also, since you’re paying for a service, the providers should be held accountable in case of any problems. Your payroll service provider should be willing to pay back any amount of fines due to mistakes in tax filing or the deductions missed. Thus, making sure you’re not spending too much during the tax time. 

Payroll Services in Eastern Suburbs Ensure Accuracy:

Managing payroll is harder than you think. There’s a lot of paperwork and a lot of details that you need to keep in mind. These include separate working hours for your employees, hourly rates, bonuses, benefits and tax deductions, tax rates and whatnot. So, getting it done accurately is essential.

Payroll services in eastern suburbs are experts in their field. They’ve worked for years in their field to make sure everything is top-notch in quality. So, they will give do all the calculations accurately and give out the best outcome. Thus, saving you from a lot of financial struggle and stress. 

Payroll Services Helps Maintain Employee Satisfaction:

Like we’ve mentioned before, the key to your employees’ satisfaction is regular payment. You have to pay your employees regularly to make sure they’re satisfied. When you have a good payroll service in place, the employees will get their payment in time without any hassle. 

Furthermore, some payroll services have a streamlined service which allows your employee to access their details themselves. They’ll find all the information about their payments, benefits, taxes, etc. on the go. As a result, they will always be up-to-date with the information regarding their payments. They can reach out to the accountants in case of any hassle. Thus leaving no room for error in the long run.

Payroll Services in Eastern Suburbs Save Time:

Payroll management is a massive task. Also, the workload gets much more severe for small business owners. Because you don’t have a lot of manpower, and you might even go for outsourced CFO services or accounting services to ease accountants’ cost. Thus, if you plan on managing your payroll by yourself, you’d have to struggle to make time for everything.

When it comes to payroll services, your service provider has adequate manpower to manage everything for you without any hassle. As a result, you’d get everything done in time without any hassle, saving you time to concentrate on other important business affairs.

Payroll Services in Eastern Suburbs Help you Take Better Decisions:

While this isn’t a direct benefit, this is still an essential aspect of your business. When you outsource your payroll management to a payroll service, you have a huge weight lifted off your back. The time and energy you had to invest by yourself to manage your payroll will be done by a company specialising in doing so. Thus, keeping you free from any hassle. Giving you enough time to engage in other parts of your business and invest in decision making.

Furthermore, some payroll services in eastern suburbs can provide you with a projection of how much money you will spend in that fiscal year. Thus, you will have a clear idea of your investments and how many money you’d have by the end of the year. Which can help you decide your future investments better.

Payroll Services in Eastern Suburbs Helps you Save Money:

You might be wondering how having a paid service can help you save money? Actually, it can! If you want to manage your payments in-house, you’d need to hire multiple accountants and manage everything for them. However, in a payroll service, you only have to pay a service fee on a monthly or yearly basis. 

Also, having employees mean you have to manage everything for them as well. Employee bonuses, benefits, deduction, etc. However, payroll services in the eastern suburbs will require a fixed payment. Thus, helping you save money that you can invest later.

Conclusion:

Payroll services can be a great tool for small business owners. Because not only do they keep the employees’ satisfied, they can also help keep the business afloat. The benefits provided by good payroll services in the eastern suburbs can be the boost your business needs. 

In this article, we’ve discussed six key benefits you’d get from payroll services in the eastern suburbs. We hope you found this article helpful!

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Your payroll systems in eastern suburbs should have some must-have features!

Payroll Systems in Eastern Suburbs: Six Must-Have Features

Running a small business comes with its own share of stress. One of the most significant issues of small businesses is the lack of manpower. Since you don’t have many people to work for you, managing everything can be a daunting task. Things get even more complicated if you have employees, and that’s where the payroll systems in the eastern suburbs come into the discussion.

Generally, employees are more concerned about their payments when working for a small business than a large one. Because of the competitiveness of the market and the uncertainty of the business world, it’s normal for them to feel concerned about the regularity of their payments. However, with a good payroll system in the eastern suburbs, you can ensure regular payment for your employees without any hassle.

However, when you’re choosing payroll systems in the eastern suburbs, you need to ensure they provide a few features. In this article, we’re going to discuss these mus-have features for you!

What are Payroll Systems in Eastern Suburbs?

A payroll system generally refers to software used to keep track of your employees’ payments. They monitor the necessary details like the employees’ working hours, regular payments, frequency of payment, bonuses, employee benefits, insurance, etc., to help you pay your employees in time as well as maintain and procure documents during taxation and audit. 

Types of Payroll Systems in the Eastern Suburbs:

Generally, there are two kinds of payroll systems available. These include:

Online Software Based Payroll System in Eastern Suburbs

Online payroll systems have recently become very popular. They’re generally accessed through the service provider’s website, s you can access them from any computer from anywhere. Furthermore, all the information is stored in cloud storage, so you won’t need space in your own system.

However, online payroll systems in the eastern suburbs can be a bit troublesome. Because you’d need to pay for regular subscriptions as well as cloud storage fees to keep your information in place.

Computer Program Based Payroll Systems in Eastern Suburbs:

If you don’t want to pay for an online program, then getting a computer program based payroll system can help. For that, you need to purchase and download the payroll system on one designated computer.

One advantage of the computer program based payroll software is that you don’t have to pay a lot of money. One-time purchase fees or subscription costs are enough. Since the information will be stored on your computer, you won’t have to pay for an expensive cloud storage subscription.

Must-Have Features for Payroll Systems in the Eastern Suburbs:

Integration with the Available Tools:

Suppose you have an accountant service or outsourced CFO services for your business. In that case, your payroll system should work coherently with them. Your system should comply with all the necessary requirements so that all your stakeholders can work comfortably.

So, before you get payroll systems in the eastern suburbs, discuss your business’s other stakeholders. Ensure they comply with all your needs and the payroll system is comprehensive enough to work with their needs.

Scalability:

When you’re running a business, your priority should be growth. Even if you have a few employees now, you’d have more employees in the future. The payroll systems in the eastern suburbs you’re using should be scalable enough work even when your manpower increases. 

You should prioritize scalability because it will ensure that you can use a single service for a long time instead of shifting services repeatedly. Because shifting comes with its own share of problems.

Book-keeping:

Your payroll service should have some sort of book-keeping or record-keeping features. They should store data of the money that’s being paid in the form of wages and all the necessary details. 

These records will be crucial when paying taxes; you might be eligible for certain tax deductions if you provide your information in time. Generally, payroll systems store this information in your computer storage or cloud storage. So, always make sure this information is stored accordingly.

Access to Streamlining:

Having a robust payroll system helps to keep your employees happy. One advantage of having payroll systems in the eastern suburbs is that you can access the information without any hassle if your payroll system has streamlining features.

Streamlining refers to providing information to your employees on a specific portal. Your employees can sign in and see all the relevant details on their payment. These include their wages, benefits, deductions, etc. 

Streamlining can help your employees receive their information faster, thus saving your employees from a fair bit of hassle.

Security:

Your payroll information is very sensitive. Information such as your companies expenses, taxes, personal information of the employees is very sensitive. So, you need to make sure the payroll services for eastern suburbs you’re receiving has high-level security mechanisms.

You have to take a few factors into account for your security. These include powerful encryption for the specific database, cloud-storage protection, or password protection for the offline features.

If your payroll systems provider has streamlined services, then make sure the employee access portal is safe and free from any anomalies. Your employee protection should be your priority.

Taxation:

Your payroll information is crucial when it comes to taxation. There’s a lot of paperwork involved in tax, and your payroll information needs to be submitted as well. Your payroll systems in the eastern suburbs should be able to help you during taxation. Things such as managing paperwork, fining documents, and making relevant calculations should be done by your payroll service.

Conclusion:

The key to the growth of a company is happy employees. The best way to keep your employees satisfied is by providing them with regular payments and benefits, and that’s why you need payroll systems in the eastern suburbs.

A good payroll system will help your business in more ways than one. From payments to taxes, everything is simplified. However, the goal should be to get the best service available. In this article, we’ve discussed six services a payroll provider must-have. We hope you find this helpful!

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When do you start paying taxes in Australia? Find out more!

When Do You Start Paying Taxes in Australia?

Paying taxes regularly is an integral part of our civic responsibilities. The money we pay in the form of taxes is eventually spent on welfare activities. So, it’s important to pay our taxes on time! But the question for any Australian might be, “When do you start paying taxes in Australia?”

Just like everything else, there’s a correct time for paying taxes. You have to be eligible in certain criteria to pay taxes. You have to pay your taxes in time to prevent any legal jeopardy in the long run. Furthermore, paying taxes in time comes with its own share of benefits in the form of deductions and subsidies. 

In this article, we’re going to discuss certain factors that play a role on when do you start paying taxes in Australia. Let’s begin!

When Do You Pay Taxes in Australia?

When you pay taxes, depend on a lot of factors. These include age, minimum income, residence, etc. Here’s everything you need to know about them!

What Age Do You Start Paying Taxes in Australia:

You have to reach a certain age to be eligible to pay taxes. In Australia, everyone under the age of 18 is considered a minor, and aren’t eligible for taxes. However, certain people are exempted from this list and are supposed to pay taxes regularly.

However, certain people are considered to be “excepted person” who are supposed to pay taxes based on their income. These include people who have managed to complete their formal education and are currently doing full-time jobs. You’re also supposed to pay taxes if you’re disabled and received support from disabled trust, and you’re the main beneficiary. Also, for people who are “double orphans”, i.e. lost both of their parents and rely on the double orphan pension, you have to pay taxes accordingly.

Furthermore, certain income is considered to be excepted income which is taxable even if you’re under 18. These include revenue from assets and investments, pension and superannuation funds (if you have any via inheritance), or have your own business running. 

If you receive any sort of excepted income, you have to pay taxes based on it. However, they are somewhat technical, so we recommend that you consult your tax lawyer or tax accountant before going with the taxes. 

Minimum Income:

The most common answer to when do you start paying taxes in Australia is whenever you’re eligible. However, the conditions are different for different groups of people.

If you’re an Australian resident, you will be eligible for taxes if you make more than 18,200AUD per year, according to the new guidelines by the Australian Taxation Office

RangeAmount of Tax Payable
0 – 120,000AUD32.5 cents for each 1AUD
120,001 – 180,000AUD39,000AUD plus 37 cents for each 1AUD over 120,000AUD
180,001AUD and over61,200AUD plus 45 cents for each 1AUD over 180,000AUD

The amount of taxes to be paid by Australian residents in this fiscal year is:

Foreign Residents:

Individuals who live in Australia due to their work commitments are also supposed to pay taxes on their annual income at the end of every fiscal year. However, the rules are slightly different for foreign residents.

So, when do you start paying taxes in Australia as a foreign resident? Check the table to find out!

RangeAmount of Tax Payable
0 – 120,000AUD32.5 cents for each 1AUD
120,001 – 180,000AUD39,000AUD plus 37 cents for each 1AUD over 120,000AUD
180,001AUD and over61,200AUD plus 45 cents for each 1AUD over 180,000AUD

However, as a non-Australian resident, you have to lodge a tax return for any amount of money you make in Australia. You might also be eligible for some additional fees based on your tax return.

However, once you receive Australian resident status through the residency test, you can apply for tax deductions on your initial expenses. Generally, you’re considered an Australian after 183 days of living in Australia. So, make sure you check all your residential details beforehand.

Working Holiday Makers:

Working holiday makers are people who work as in Australia temporarily under the visa subclass 417 or 462. Since they’re temporary residents, they are considered for different taxation laws. 

The taxation rules are somewhat more stringent on working holiday makers since they’re staying only for a brief period. Also, just like non-resident Australians, they have to lodge tax returns on any amount of money they make during their time in Australia. 

The range and amount of payable taxes on working holiday makers are:

RangeAmount of Tax Payable
0 – $45,00015%
$45,001 – $120,000$6,750 plus 32.5 cents for each $1 over $45,000
$120,001 – $180,000$31,125 plus 37 cents for each $1 over $120,000
$180,001 and over$53,325 plus 45 cents for each $1 over $180,000

Conclusion:

Paying taxes is essential for everyone. Whether you’re an individual or a business, you have to pay taxes if you’re eligible. However, many people aren’t sure about taxes and hence make mistakes or delay their payments.

In this article, we’ve answered the question of when do you start paying taxes in Australia. We hope you found this helpful!

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Outsourced CFO Services might be the boost your business needs

Outsourced CFO Services: All you need to know!

For small businesses, financial management is a key issue. The budget is always very tight, and there’s a lot of room for error. Making the slightest error can cause a lot of trouble in the long run, and that’s where getting outsourced CFO services help.

Generally, small businesses don’t have the financial capability to hire a financial expert full-time. However, having an expert to support your finances can take your business to the next level. However, receiving outsourced CFO services can be somewhat technical. In this article, we’re going to discuss everything you need to know about outsourced CFO services to help you make your decision. Let’s begin!

What is an Outsourced CFO Service?

Outsourced CFO services refer to consulting a certain company or individual that has expertise in financial matters. They provide you with expert advice, suggestions and help your business find its groove. 

Generally, a CFO is a person who takes over all the financial matters of a business and micro-manages all the ins-and-outs of that business. However, since small businesses don’t have considerably experienced finance experts or the financial means to hire an expert, they can reach out to an outsourced CFO service for help.

Services Provided by Outsourced CFO Services:

Helps to Find Stability:

Businesses often go through rough patches. Whether that’s struggling with the lack of finances or improper financial management, struggles are prevalent in the world of business.

A financial export understands these situations and knows how to tackle these. As a result, he can easily show your business to get out of these sticky situations, eventually giving your business the stability it needs.

Short and Long-Term Planning:

The key to survival for a business is to plan for its future. However, considering how uncertain the business world is, planning efficiently is the key. With an experienced CFO at the helm, you can get short term and long term forecasts of the market and ideas on how you should make the best of it. Having a proper idea about the future can help your business survive any uncertainty coming in its way.

Financial Reporting:

Understanding your companies reports and making decisions based on them is another benefit you can get from outsourced financial services. Suppose you have multiple products available in the market. However, not every product is providing your preferred output, that’s where your outsourced CFO services play their role.

To begin with, the financial expert can see the policies enacted by your products and provide valuable suggestions. He’ll conduct in-depth research and provide reports on why certain products are performing worse than the others, and how to get a better outcome from these products.

Budgeting:

Having a clear budget helps to make your future financial plans. Consulting an outsourced CFO service, you can get help regarding your account for a number of years.

The CFO will take a few things into account, such as current expenses, investments, assets and liabilities, payroll management, etc. and chalk up a financial plan that will help you sustain your business for a few years. 

Having a clear budget means you know how much money you need to spend to make your business grow and sustain. As a result, you can easily find investment ideas in the long run.

Structuring and Raising Capital:

How much money you have as your capital is crucial for your business. You need to find the right combination of assets, debts and liabilities to make your business stand out. A good CFO can help you find the right spot that protects your business as well as accelerates growth. Also, having an idea about capital can massively help during taxation.

Furthermore, experienced finance professionals have a plethora of connections and networks that they can connect your business to. These will ensure more potential for your business as they get more potential investors to improve its capital.

Pros of Outsourced CFO Services:

Cost-effective:

Having outsourced CFO services mean that you don’t have in-house staff to pay for. As a result, you don’t have to pay extra costs such as insurance and employee benefits. For a small business, these benefits can really save a fair bit of money for your business.

Reduced Workload:

As the head of your business, it’s your responsibility to manage everything. However, having someone to share the workload can really make your life easier. Having an experienced CFO managing your finances can reduce your businesses’ additional hassle of financial management, thus reducing your shoulders’ workload. Allowing you to focus on your work.

Time-efficiency:

Small businesses generally suffer from a lack of manpower. As a result, it takes time to manage certain things that could otherwise be done much sooner by a group of professionals.

When you’re getting outsourced CFO services, you’re also getting a team of experts to manage your financial matters. As a result, you can save up on a fair bit of time from managing everything.

Cons of Outsourced CFO Services:

Hidden Costs:

When you’re hiring an agency for outsourced CFO services, prepare for some additional costs. While this isn’t a case for every company, certain companies might charge you higher than usual or add extra costs over the initial fees in certain fields. So, preparing beforehand is a good idea.

Lack of Freedom:

Although this is entirely subjective, a lot of people personally struggle with the addition of people who aren’t in-house employees. When you’re getting an outsourced CFO service, you’re essentially handing over a crucial part of your business to an expert. Many people might find this limiting to their business, and eventually, find it hard to work. 

So, if you’re someone who enjoys taking decisions and working at your own pace, getting outsourced CFO services might do more harm than good.

Conclusion:

For people running small businesses, every decision is crucial. Miscalculating the smallest of steps can be disastrous in the long run. And when it comes to something as technical as finances, there’s a lot of complications involved.

Getting outsourced CFO services can really benefit your business in specific scenarios. In this article, we’ve discussed all the technicalities of outsourcing your CFO services to help you out!

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Find out about Self Managed Super Funds Pros and Cons before making your investment!

Self Managed Super Funds Pros and Cons:

Self Managed Super Funds Pros and Cons in Australia:

One day or another, all of us will have to retire. Life after retirement can be complicated since there is no stable income source. Our savings and investments will be our only option for financial stability. In order to protect Australians from financial struggles in the future, the Australian government ensures superannuation funds for its citizens. In this article, we’re going to discuss self managed super funds pros and cons to help you out!

Self managed super funds can be beneficial for many. However, a lot of people would not benefit from it. So, knowing everything in depth is important before making an investment. So, let’s find out all the details about superannuation and self managed super funds.

What is a super fund?

Super funds, also known as superannuation, are guaranteed payment schemes provided to each Australian citizen once they reach their retirement age. During your working years, your employer will deposit a part of your income to your guaranteed superannuation.

Once you reach your retirement age, you can avail yourself of the money in your super funds and use it. You can choose weekly or monthly payment schemes to receive instalments. Furthermore, you can make additional payments to your super funds, or use the money to invest in ventures like our first house or medical bills.

Generally, your employer manages your super funds. He’ll open your superannuation account through a super provider or a bank and pay your instalments regularly. However, you can also choose the kind of super account for you or get a self managed super fund. 

What is a Self Managed Super Fund?

In a self managed super fund, You can take control of your superannuation fund and make all the decisions about it. Here, you act as a trustee to your super, so you can easily make decisions about your super.

When you take a regular superannuation scheme, you have to choose your superannuation provider’s policies and rules. These decisions might not always favour you. However, when we’re discussing self managed super funds pros and cons, one of the biggest advantages is that you’re a trustee to your own funds. As a result, your decisions regarding your money is valued the most.

Types of Self Managed Super Funds:

Self managed super funds can be of two kinds, these include:

Corporate Trustee Super Fund:

You can create a self managed super fund through a company. In that case, the company acts as the trustee for your super funds. All the stakeholders are considered to be directors. They can make necessary decisions regarding the superannuation funds and other technical aspects.

In this case, the company will work based on your decisions, and you won’t have to put in any extra effort.

Individual Trustee:

You can also opt to be an independent trustee along with people you trust. In that case, everyone in the superannuation plan will be considered trustees. You need a minimum of two trustees for a self managed super fund to work like that. 

In this case, every decision will be considered a combined decision and affect everyone’s funds accordingly. Also, since no company is a trustee for you, you might need to get yourself involved in matters such as permissions and paperwork.

Self Managed Super Funds Pros and Cons:

Pros:

  • Control Over Your Money:

One of the most significant advantages of a self managed super fund is that you have complete control over your money. You can decide what to do with your money without any hassle. This is extremely beneficial if you plan to invest your super funds somewhere. If you plan on making investments with your super funds, you can do it easily if you control them yourself. Furthermore, certain risky decisions aren’t supported by companies that you can take yourself.

  • Quick and Easy Decision Making:

You might often need to make certain decisions to better utilize your money. These include investing in specific fields that can give you more profit as well as staying away from certain investments that won’t be useful in the long run.

When you have access to your own super, you can make decisions any time you want without going through a lot of paperwork. However, we recommend consulting a financial advisor before making any decision.

  • Lower Management Cost:

According to the Australian Taxation Office, the costs for managing a self managed super fund is only 0.5% of the total cost of the superannuation funds. Which is considerably cheaper than consulting an agency and paying regular fees to keep everything in check. 

Furthermore, your management costs reduce as your superannuation funds increase. This means that you will have to pay less if your fund is big or you have multiple trustees in the same fund. 

Cons:

  • Time Consuming:

Unlike conventional super funds, self manages super funds are very time-consuming. Since you’re the one managing everything, it takes a fair bit of time for you to manage everything. So, it takes longer than company-provided super. So, if you want everything to be fast-paced, self managed super might not be a good idea for you.

  • Lack of Government Compensation Schemes:

There are specific government schemes that you’re not eligible for if you self manage your super funds. This is due to the lack of access to dispute regulatory bodies when compared to companies. 

So, make sure to look into all the schemes and paperwork before investing in a self managed super fund. 

  • Involvement of Market Risks:

When discussing self managed super funds pros and cons, you have to take into consideration that your co-trustees might not have a background in finance and tax management. As a result, you might not be able to understand all the paperwork involved. So, make sure you do your research right.

Conclusion:

Your super funds can be your key to a stable retired life. For this reason, managing your super wisely is very important. If you want to manage your superannuation by yourself, you have to know the self managed super pros and cons. We’ve discussed all the technicalities of self managed super in this article. We hope you found this helpful!

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How do tax returns work? It's pretty simple!

How do Tax Returns work ? Let’s find out!

Whether you’re an Australian citizen or a foreigner residing in Australia, you have to pay taxes if you’re eligible. Although taxes are a complicated process, they’re important in the long run. Also, not paying taxes in time can cause a fair bit of legal trouble for you as well.  So, knowing how tax returns work is important.

One of the most essential parts of paying taxes in Australia is to file a tax return once you’re done paying taxes. It’s a complicated process because there’s a lot of paperwork involved. However, paying tax returns properly can be beneficial for you in a lot of ways. You might often wonder how tax returns work and why it is important to file tax returns.

In this article, we’re going to discuss everything you need to know about tax returns in Australia to give you an idea. Let’s begin!

What is a Tax Return?

A tax return is a document you submit to the Australian Taxation Office at the end of every fiscal year. The document contains all the relevant information about your taxes. These include how much money you made in the year, your assets, your superannuation funds, the amount you paid in taxes, etc. Furthermore, you also need to provide information about your additional income and any tax deductions you’re eligible for. However, you’ll only have to lodge a tax return if you’re eligible for it.

How do Tax Returns Work?

Your tax returns help the authority determine the technicalities of your taxes. Once you file a tax return, the authority goes through your documents. It determines whether you’ve paid the accurate amount of taxes based on the paperwork you provide.

Once the details are calculated, the tax officials will let you know whether you need to pay any additional taxes based on your income and assets. Furthermore, the deductions you’ve claimed in your form will also be evaluated, and you’d receive the amount of money you’re eligible for. 

Eligibility for Filing Tax Returns:

Not everyone is supposed to file tax returns. There are specific criteria that you need to fulfil to be eligible for tax returns. These include:

For Australian Residents:

For Australian residents, you have to lodge tax return documents if you have any tax deductions to avail from your payable tax. Furthermore, if your income exceeds the tax-free threshold or you have income from assets, investments other than your current job. Also, if any of your payments were already tax-deducted, especially for independent contractors or people who work on a temporary basis.

Furthermore, suppose you’re planning to leave Australia for at least one fiscal year. In that case, you’d have to lodge tax returns and adequate paperwork of your departure. 

For Non-Australian Residents

So, you might wonder how do tax returns work for non-residents in Australia? Actually, it’s not complicated at all. For non-residents, they have to lodge tax documents for any amount of money they make. However, they have to be working in a proper job in Australia to be eligible for it.

However, if your only income from Australia was investments for non-residential projects or you’re a working holidaymaker (417 or 462 visas) you won’t have to lodge any tax return documents. But if your payments exceed the 37001AUD benchmark, you will have to lodge a tax return with all the documents.

Once you fulfil the requirements to be considered an Australian resident, you might be eligible to apply for tax deductions based on the tax you paid on your time as a non-resident. However, these involve some technicalities and might not be available for everyone. 

When to File Tax Returns?

Now that we know how tax returns work, we have to lodge our tax return paperwork at the right time. In Australia, the fiscal year ends on 30th June. You’re eligible to file tax returns after 1st July up to 31st October

However, you have to ensure that you’ve paid your taxes and have all the documents prepared by then. Not filing tax returns after being eligible for it can cause legal troubles in the long run.

How to Lodge Tax Returns?

Filing tax returns can seem a bit complicated at times due to its nature. Firstly, you have to make sure you have all the documents prepared and ready before the end of the fiscal year (30th June). 

Firstly, you can use the tax return tool to determine whether you’re eligible for tax returns or not. Make sure to put accurate and correct information for correct results. Afterwards, if you’re eligible, you have to submit your documents.

The simplest way to lodge tax returns is by using the myTax section of the myGov app. You have to register at myGov and access the myTax section. Afterwards, you can submit the necessary documents, attach the required paperwork and fill the form for a seamless submission.

Otherwise, you can also collect a tax return form and fill it up manually. Once you’ve filled it up, you can send it to the necessary authority for evaluation. Although this is a bit more tedious, you can use it if you don’t have access to soft copies of certain documents. 

For a more secure option, however, you can reach out to a tax accountant for help. They’ll manage all your necessary taxation papers at once. From making tax-related documents to making essential applications, a tax accountant will do everything for you.

However, you have to ensure that you’re investing in the right accountant. Your accountant needs to have the necessary certificates and accreditations to be eligible to deal with your paperwork.

Conclusion:

Paying taxes is a complicated process. The documents and paperwork can make it seem overwhelming for you. Also, since tax returns are something you submit after taxes are over, most people overlook it. Thus, missing out on its benefits.

In this article, we’ve discussed how do tax returns work in Australia to give you an understanding of it. We hope you found this article useful!

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Payroll Service for Your Small Business

Eight Benefits of Getting a Payroll Service for Your Small Business

Running a small business is very tedious. There are a lot of acceptable margins with a lot of room for error. So, it’s essential to keep everything in check. 

If you have employees, employee satisfaction should always be one of your priorities. If your employees aren’t satisfied with their work, you won’t get your desired result. One of the essential parts of keeping your employees satisfied is ensuring they get paid on time, and there are no complications regarding their payment. And that’s where a payroll service comes in.

Payroll service in the eastern suburbs generally helps you organize the payments, manage tax papers, and keep everything in check. However, their advantages go beyond that. In this article, we will discuss some of the key benefits of getting a payroll service in the eastern suburbs. Let’s begin!

Benefits of Getting a Payroll Service:

Employee Satisfaction:

Satisfied employees are the heart of your business, and if the payment isn’t regular, your employees are likely to be dissatisfied. Generally, in small companies, employees are more concerned about their payment due to markets’ instability.

A payroll service will ensure your employees get the payment on time. Since your payroll provider will do all the paperwork, the chances of delays or mistakes are minimal. Thus, your employees will be satisfied without hassle.

Furthermore, if you have a comprehensive payroll system, your employees will get to see their net worth. They’ll get to know how much they’re making and how much they’ll make in the future based on their performance. This keeps employees motivated for the long run.

Reduced Workload:

Small businesses generally don’t have a lot of manpower. Very few such companies have in-house accountants to deal with the financial documents. As a result, if you have multiple employees in other departments, your accountant suffers to make all ends meet. 

However, if you have a payroll service for your business, your accountant won’t have to struggle. Even if you’re using a payroll software, your accountant still has a lot more freedom when working. 

Legal Affairs:

When you have employees for your business, you have to adhere to a lot of laws. If you’re not aware of them, you might end up with fines. However, a payroll service in the eastern suburbs will know all the legal matters and technicalities. As a result, they’ll ensure you aren’t breaching any laws with your current payroll. 

Benefits During Taxation:

When you’re paying taxes, you might often struggle with the paperwork. You have to submit details of your payroll to the relevant authority when filing your taxes. Any discrepancies during submission can cause trouble for you.

To make life easier for small businesses, the Australian government provides multiple lucrative benefits and tax cuts to business owners. However, you’d need valid paperwork to be eligible for them. You might be eligible for benefits based on your payroll, and a payroll service can make it easier for you. 

Strategic Planning:

Having a proper payroll system means you have all the information you need about your employees readily available to you. You can see how much money is being spent as payments, individual payments and bonuses, etc. 

Since you have all the information readily available, making financial decisions are significantly more manageable. You can use this information to decide future business plans, make other investments, etc. 

Time-saving:

Maintaining payroll generally is a tedious process. Based on your business, you might need to prepare your payroll once or twice a month. All of these require a lot of paperwork, details of employees salaries, bonuses, insurances, etc., which can take up to 10 hours a month based on the number of your accountants and the number of employees.

However, if you outsource your payroll management to a payroll service in the eastern suburbs, they will save you from all the hassle. They will make sure your employees have received their payments in time; all the paperwork is complete. Thus, saving you a considerable amount of time to concentrate on other matters related to your business.

Increased Monitoring:

If you’re using a payroll software, you can use it to monitor your employees better. A digital payroll system monitors your employees’ entry and exit times, the number of leaves they’ve taken, and their working hours. As a result, you can see which employees are working better and aren’t living up to your expectations.

This information comes in handy when you’re paying your employees year-end bonuses and providing feedback based on their performance.

Improved Company Reputation:

Maintaining a good reputation is vital for small businesses. While having a payroll system won’t directly affect your reputation, it improves many minor things that can ultimately uphold your company’s reputation.

Things like employee satisfaction, regular payments, positive taxation records can help a business significantly. These small details can put your business on the map as a reliable and trustworthy employer, which will attract future job-seekers to your company. Furthermore, this draws your businesses to customers as an employee-friendly company. 

Conclusion:

When it comes to running a business, there’s a lot more than meets the eye. Even the slightest error and the future of your company can come crashing down. For this reason, being ever vigilant about critical factors such as employee payments is important. 

A payroll management system can help improve your business drastically. Although there’s a bit of initial investment involved, the benefits are massive. A good payroll service might be the boost your business needs at the moment.

In this article, we’ve discussed some of the most significant benefits of having a payroll service in the eastern suburbs for your business. However, there are other small benefits, as well. We hope you find this article helpful!

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