Contractor/ABN - what do I need to do/charge?

[Scouse]

Hi,
After playing 'stay at home' dad for 5 years, a one/two day per week job has come up 10min from home fixing electric carts (golf carts and bigger).

The owner is looking for a retired auto electrician. I'm not really old (or financial) enough to retire but I'm a light vehicle mechanic by trade with my auto electrical licence too. I must admit I don't have a massive amount of electrical experience but I have rewired a few cars & work on P38s often enough so I cant see Chinese electric carts being too big a challenge.


I'm sure its not a problem but they want me to get an ABN & work as a contractor. I've not had to do this before as I've always works for bigger companies but I assume I can apply for an ABN online somewhere (I'll do a search shortly) but my biggest 'problem' is money. The business owner doesn't know what to pay me & I don't know what to ask. I'll have to look up tax rates & such I guess.

Speaking of tax, I suppose I'll have to do a BAS every few months & look into GST as well.


I'd love (need) to go back to full time work but school/therapies don't allow that.

I might just say no & stick to working on Ron's car for a free lunch :).

[one_iota]

Hi,
After playing 'stay at home' dad for 5 years, a one/two day per week job has come up 10min from home fixing electric carts (golf carts and bigger).

The owner is looking for a retired auto electrician. I'm not really old (or financial) enough to retire but I'm a light vehicle mechanic by trade with my auto electrical licence too. I must admit I don't have a massive amount of electrical experience but I have rewired a few cars & work on P38s often enough so I cant see Chinese electric carts being too big a challenge.


I'm sure its not a problem but they want me to get an ABN & work as a contractor. I've not had to do this before as I've always works for bigger companies but I assume I can apply for an ABN online somewhere (I'll do a search shortly) but my biggest 'problem' is money. The business owner doesn't know what to pay me & I don't know what to ask. I'll have to look up tax rates & such I guess.

Speaking of tax, I suppose I'll have to do a BAS every few months & look into GST as well.


I'd love (need) to go back to full time work but school/therapies don't allow that.

I might just say no & stick to working on Ron's car for a free lunch :).
No! Go for it. As for working on Ron's vehicle remember that there is no such thing as a free lunch. [emoji4]

[bblaze]

go and see your accountant, easiest way. You may not need to do quartly bas or register for gst but you will need to see an accountant
cheers
blaze

[donh54]

If you google getting an ABN, be aware there are mobs out there who will spruik themselves to you to solve all the issues and hassles, for a fee of course! An ABN can be organised online via your state fair trading website. There is a registration fee, but it's not much (<$45 when I did mine a few years ago) for a Sole Trader. You will also need to visit the ATO and register for GST, if your turnover is expected to be over their threshold.
As far as the hourly rate goes, you need to factor in your costs over and above your hourly wage. Superannuation, public liability insurance (an absolute must), travel, wear and tear on your tools, add a bit extra for the time doing your BAS or to pay an accountant/bookkeeper to do it (if you need to register for GST) Depending on the workload, you may also want to add a bit for holiday pay.
Remember, if you are not registered with the ATO for GST, you cannot add GST to your invoices, so you must cover the GST cost on parts you may buy, with your markup, since you can't claim that back from the ATO. Oh yeah, and don't forget your PAYG tax, too.
All pretty simple really. [biggrin]
Remember, most companies wanting contractors to do their work are looking to offload the paperwork and extra payments (leave loading, super, payroll tax, workers comp, etc), so you need to allow for any/all of that. Quote them a tradies wage plus a little bit, and you'll be wondering where your money/lifestyle went in no time. If all you have to do is turn up and do the work, (they supply everything except your hand tools) somewhere between $50 and $70 per hour should give you a reasonable take home pay, and still be cheaper for them than hiring you full or part time.
Do up some figures, then go to a good accountant and run them by him/her first.

Good luck!

[Scouse]

OK, ABN done. Ill check out the ATO site in a minute & look around for a local accountant too. Actually, there's one across the road from me who started up last year.

[Chops]

Good luck Scott, working on carts etc, can’t be too difficult as my BIL does those little scooter thingies, and doesn’t seem to struggle at all, you’ve got trades behind you,, easy peasy mate.

I still I’ll have to find out if I can reinstate my stuff too,, must get onto that, and not 10 months to go [bigwhistle][biggrin]

[Scouse]

public liability insurance (an absolute must), Wow, just done a few online quotes - geez, that's a killer at around $200 - $250/month.

[Vern]

Wow, just done a few online quotes - geez, that's a killer at around $200 - $250/month.Thats far to expensive! I used to pay round 3 times that for a whole year, as an Electrical contractor with employees. That gave me $10mil im cover.

[BMKal]

Wow, just done a few online quotes - geez, that's a killer at around $200 - $250/month.

Yep - and that's just one of the insurance costs that I had to satisfy some of my clients when I had my own business as a sole trader a few years back. The likes of BHP etc insisted that I carry at least $1M in Professional Indemnity as well. In the end, the amount of work they were giving me did not justify me continuing as a sole trader.

[donh54]

Wow, just done a few online quotes - geez, that's a killer at around $200 - $250/month.

Got a SGIO or similar in your state? Usually way cheaper. Try calling an insurance broker (a "real" one) - not the likes of Choosi et al - they just steer you to whoever pays them the most commission. A few years ago, I was paying about $300 year for $10m cover. Remember, like all insurance companies, what you tell them determines the premiums. If you just said "electrical work" they need to cover you for everything to do with high voltage electrical, from power points to sub-stations. A bit different from 12/24/48V batteries and motors.
Whatever the cost, you need to factor that into your hourly rate as a fixed cost.
Shop around [thumbsupbig]

[cjc_td5]

Wow, just done a few online quotes - geez, that's a killer at around $200 - $250/month.I pay around 600 bucks per year for 20M PL coverage....

[rick130]

Mine was always a lot higher than what you fellas are paying and I used a broker.
Anywhere from $1100/year up to $2400 for refrig/AC work.

At one point 20 years ago I struggled to get cover as too many claims by other contractors in the industry the previous year. A few houses had been burnt down....

[V8Ian]

Scott, another expensive insurance will be a substitute for workers' comp. As a sole trader you won't be able to use Work Cover (Queensland rules, check NSW).

[Scouse]

It might be all over even before it began. He's offered me $30/hr.
I told him no & explained why - he had no idea I'd need PL insurance. Anyway, he's offered me cash for a couple of hours work tomorrow, just to get a taste of what it's like & I'll check with the accountant what other costs I might be up for.

[Scouse]

Talk about being thrown into the deep end. I went around today & he gave me this old cart that he & his offsider had been trying to get going for weeks. Parts had been thrown at it, screws completely stripped from removal a hundred times, you get the idea. If there's one thing I hate, it's trying to fix stuff after someone else has had a go at it.
I was given the wiring diagrams.....in Chinese. Someone has translated the colours but they don't match what's on the cart. On the cart itself, even the main power cable from the solenoid to the motor ECU is black, like the earth cables. Other cables appear to be different colours at each end. The fault finding chart is in classic Chinglish, great fun trying to work out what they mean.

Anyway, this cart was going but now doesn't. The owner told me the battery indicator was showing low but he tested the batteries & they're fine - 39v on a 36v system. It didn't take long to sort out the loose terminals on the main solenoid to fix the battery indicator but everything else was poo. I'm sure someone has been playing with the wiring somewhere along the line as there's a massive flash when hooking up the main battery earth now. Tested the solenoid, OK. Found the short went when the motor speed ECU was disconnected from the main switch/pedal harness so I'm sure the problem is further along there somewhere. The strange thing is if I ignore the 'short', nothing seems to be affected by it. Nothing gets hot, nothing smells. I thought for a moment it might be normal for a 36v system but my gut says no.

Anyway, he's upped the pay to $50/hr but I'm not sure now I want to work for him. I get the feeling he just wants this problem cart sorted out then I'll be called only when needed again. I don't want or need the hassle of getting my insurances sorted out only for the work to dry up. Off to the accountant tomorrow morning & see if she thinks it's a good idea or not.

[pop058]

Scott, another expensive insurance will be a substitute for workers' comp. As a sole trader you won't be able to use Work Cover (Queensland rules, check NSW).

If you are being paid based on an hourly rate, Work Cover will deem you as an employee and your "Boss" is/will be held responsible for any Work Cover claims. I would imagine the ATO would also have an opinion on a Sub Contractor with an ABN working for an hourly rate.

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[TasD90]

My recollection when GST was introduced is that your turnover had to be more than $50,000 per annum before GST applied. Happy to be corrected if this is not still the case.

Peter.

[TasD90]

Just googled it up and the threshold is now $75,000 dollars. You probably won't need to worry about it !

Peter.

[V8Ian]

If you are being paid based on an hourly rate, Work Cover will deem you as an employee and your "Boss" is/will be held responsible for any Work Cover claims. I would imagine the ATO would also have an opinion on a Sub Contractor with an ABN working for an hourly rate.

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If they know that is the intention, they will not issue the ABN. There are ways around it as long as "Labour Hire" is stated.

[cjc_td5]

If you are being paid based on an hourly rate, Work Cover will deem you as an employee and your "Boss" is/will be held responsible for any Work Cover claims. I would imagine the ATO would also have an opinion on a Sub Contractor with an ABN working for an hourly rate.

Get adviceHourly rate work can be done as long as other rules are met, the main ones being providing your own tools, managing own time, and the biggie, the 80/20 rule (ie no more 80% of "income" from one client.

[pop058]

Hourly rate work can be done as long as other rules are met, the main ones being providing your own tools, managing own time, and the biggie, the 80/20 rule (ie no more 80% of "income" from one client.

With the ATO maybe but not Work Cover in my experience.