RW - foRWard Health & Wellbeing eMag - Feb26 - Flipbook - Page 47
Tax Considerations
All income is taxable.
If your business earns
more than 75,000
dollars a year, you must
register for GST.
percent of the workforce,
now work as freelancers,
contractors or run side
businesses. Globally,
the World Bank reports
that one in 昀椀ve workers
participate in freelance or
digital gig work.
Technology and lifestyle
changes have made
this kind of work more
accessible than ever.
Platforms such as
Airtasker, Upwork and
Fiverr allow people to
earn in 昀氀exible ways. Yet
many gig workers 昀椀nd that
managing cash 昀氀ow, tax
and superannuation can
be more dif昀椀cult
than expected.
Treating Gig Work
Like a Regular Job
Gig work is not a steady
pay cheque. Income can
昀氀uctuate from month to
month, so you need to
plan for the quiet times as
well as the busy ones.
Start by paying yourself a
regular income from your
business account into your
personal account. This
creates consistency and
helps you manage your
spending. Save the rest
in a business account for
expenses, savings and tax.
According to ASIC’s
MoneySmart, building
an emergency fund with
three to six months of
living expenses is essential
for freelancers. It provides
a 昀椀nancial cushion when
payments are delayed or
work slows down.
TIP: Automate a small
transfer to a savings
account every time
you are paid. Even
small, regular amounts
will build up over time.
Freelancers should set
aside around 25 to 30
percent of each payment
to cover income tax
and the Medicare levy.
The Australian Taxation
Of昀椀ce recommends
keeping separate
accounts for business
income, expenses and
tax to make life easier
at the end of the
昀椀nancial year.
Accounting tools
such as Rounded,
QuickBooks and
Xero can help track
invoices and expenses
automatically. You will
also need an Australian
Business Number (ABN)
if you are earning
freelance income.
TIP: Treat tax as
a non negotiable
business expense.
Transfer a portion
of every payment
into a dedicated tax
account immediately.
