Hi, I am a sole trader earning less than $50,000, not registered for GST and already using the PAYG instalments for this income. I am about to gain employment part time in addition to my sole trader income and wondering if I can still claim the Tax-free threshold with this new employer?
I am putting aside funds from my sole trader business to put into super to reduce my tax for this financial year.
Any advice would be much appreciated.
Thank you
Hello @Billy20,
At the end of the day that decision comes down to your own preferences. If you are sure that you have the tax component handled from your sole trader income in the PAYGI system then if should be fine for you to select the tax-free threshold. However, if you're unsure and want to make sure you don't end up with a debt at the end of the year you could choose to not select it, so you are taxed more.
Hello @Billy20,
At the end of the day that decision comes down to your own preferences. If you are sure that you have the tax component handled from your sole trader income in the PAYGI system then if should be fine for you to select the tax-free threshold. However, if you're unsure and want to make sure you don't end up with a debt at the end of the year you could choose to not select it, so you are taxed more.
I am in a similar situation. I work casually earning $300 per week (15,600 per year) and Iam a sole trader earning 687 per week (35,724 per year) combined is 51,324 per year.
I am wondering if I should be claiming tax free threshold for the job I am employed in? If I do/don't will this effect me? If so how?
Also should I be putting away money for the job I am employed in?
Any help appreciated 🙌
Hey @Crystaluobikis,
As @TeddyATO has advised it's your preference whether you claim the tax-free threshold.
Claiming it means you're only paying the tax that's required to be paid on the employer income.
If you choose not to claim it, then you'll be taxed at the higher rate and the extra will go towards your sole trader income. However, it still may not be enough to cover what you're earning as a sole trader.
As you're employed and a sole trader you may need to look at entering into the PAYG instalment system so that you're paying the tax on your sole trader income as well. Otherwise, when you lodge your tax return you may end up with a debt.
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