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Paying Tax for Online Work

Newbie

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I have recently decided to try and make some money online through an online subscription service but am not sure how paying tax would work? I am currently causually employed (making over the $18,000 threshold) and this would be considered a second job. I'm just a bit lost on where to start tax wise, do I need an ABN or do I do PAYG payments? Any help would be greatly appreciated! 

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ATO Community Support

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HI @i-vys,

 

I would recommend to go through the ABN eligibility tool and answer the questions asked to confirm whether or not you are required or eligible for an ABN. 

 

If you are eligible you would apply online through the ABR. The ABN will either be issued to you on the spot, if there are no further checks we need to complete or take up to 20 Business days.


Either way if you have or don't have an ABN and you lodge a tax return with business and/or investment income above the entry threshold, you‘ll need to start paying PAYG instalments.

 

In the first financial year you start earning business or investment income you can set aside the tax payable once you have worked it out using our tax rates and use it to pay your tax bill when lodging your Income tax return. 

 

We will automatically enter you into the system if you qualify or you can contact us to request to be manually entered in.

 

In regards to the amount of tax you should put aside or that will be payable also depends on which source of income you will be claiming the tax-free threshold from. It's generally advised to claim the tax-free threshold from the greater income, however it's your choice in the end.

 

Helpful links

ABN eligibility

PAYG instalments

How to start paying instalments 

Income tax rates

1 REPLY 1

Most helpful response

ATO Community Support

Replies 0

HI @i-vys,

 

I would recommend to go through the ABN eligibility tool and answer the questions asked to confirm whether or not you are required or eligible for an ABN. 

 

If you are eligible you would apply online through the ABR. The ABN will either be issued to you on the spot, if there are no further checks we need to complete or take up to 20 Business days.


Either way if you have or don't have an ABN and you lodge a tax return with business and/or investment income above the entry threshold, you‘ll need to start paying PAYG instalments.

 

In the first financial year you start earning business or investment income you can set aside the tax payable once you have worked it out using our tax rates and use it to pay your tax bill when lodging your Income tax return. 

 

We will automatically enter you into the system if you qualify or you can contact us to request to be manually entered in.

 

In regards to the amount of tax you should put aside or that will be payable also depends on which source of income you will be claiming the tax-free threshold from. It's generally advised to claim the tax-free threshold from the greater income, however it's your choice in the end.

 

Helpful links

ABN eligibility

PAYG instalments

How to start paying instalments 

Income tax rates