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abakbak(Newbie)Newbie
3 Sept 2024

Hello,


Thanks in advance for your help with this. I have a job that earns me just under $80K a year and I want to set up an online store side hustle that uses drop shipping model. My brother who lives in Asia is going to help me with this by sourcing the right suppliers and paying for the goods. After I have made online sale, I will send him the cost of the items.


I already have an ABN because in between office jobs I've worked as a freelancer and contractor providing professional services. I'm not registered for GST because income through my ABN has never reached $75000 per year.


My questions are:


1) Do I now need to register for GST on my ABN given I am earning income of $80K as an employee for an organisation or is that not relevant? Is the GST rego only required if your income on ABN only exceeds $75K?


2) Will I be required to pay 30% income tax on my revenue from my online store, along with my office job salary?


3) Given I'm paying my brother for the cost of the items he's purchasing on my behalf, do I still need to get invoices from the end suppliers? And if so, can they be under my brother's name considering he's the one directly dealing with them or do they need to be made out to me?


Thank you so much for your help!



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786 views
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Most helpful response

Most helpful reply

Neetaa(Initiate)Initiate
3 Sept 2024

Hi abakbak,


For your knowledge ABN means you are doing/working as a sole proprietor business and it has no any relation with your employment income. While filling the tax return the income on ABN and TFN both sum up to determine the tax rate threshold.


1) if you are earning salary as an employee then it is not included in determining threshold for GST registration. It is compulsory to register for GST if your business income/turnover is more than $75000/- but if it less then its your choice as you can register for GST if its more beneficial in terms of you pays GST on purchases you made then you can claim it as refund.


2) If this business is on your personal ABN then this income after expenses added to your individual employment income and taxed at individual threshold tax rate.

But if you register a company and run this business under company name then it taxed under company hand@25%.


3) The business expenses should be made under business name only. So when you purchase the materials/goods or occur any expense then invoice/bills should be named under business name so that you can claim as expense for business income.

All replies

Most helpful reply

Neetaa(Initiate)Initiate
3 Sept 2024

Hi abakbak,


For your knowledge ABN means you are doing/working as a sole proprietor business and it has no any relation with your employment income. While filling the tax return the income on ABN and TFN both sum up to determine the tax rate threshold.


1) if you are earning salary as an employee then it is not included in determining threshold for GST registration. It is compulsory to register for GST if your business income/turnover is more than $75000/- but if it less then its your choice as you can register for GST if its more beneficial in terms of you pays GST on purchases you made then you can claim it as refund.


2) If this business is on your personal ABN then this income after expenses added to your individual employment income and taxed at individual threshold tax rate.

But if you register a company and run this business under company name then it taxed under company hand@25%.


3) The business expenses should be made under business name only. So when you purchase the materials/goods or occur any expense then invoice/bills should be named under business name so that you can claim as expense for business income.

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I have a job and want to start an online store the side using dropshipping. What taxes apply? | ATO Community