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

Originally Posted by 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 .

No! Go for it. As for working on Ron's vehicle remember that there is no such thing as a free lunch.

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

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.
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!

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.

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

Originally Posted by donh54

public liability insurance (an absolute must),

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

Originally Posted by Scouse

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.

Originally Posted by Scouse

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.