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Re: What do I need to have to accept commissions as a graphic designer/digital artist?

Newbie

Views 867

Replies 1

Hey! I am currently about to accept commissions as freelance graphic designer, it has started as a hobby but i have been receiving request lately and have decided to accept payments in exchange for a commission. I just have a few questions I am a little confused with.

 

I am unsure how to go about this, i am applying for an ABN as a sole trader just to be sure, as i am accepting payments and have been recommended to take one just in case of the payment withholding? I do not have constant commission requests, and i am in complete control of how many commissions i take (for example, i may take 2 commissions in one month and 3 in the next) therefore what i earn will vary according to me. How will this work with tax and how will it affect my taxes?

 

As an artist, there is a high probability my art will be used for merchandise such as T-shirts than i may earn a share from for each sale of the shirt. For example, a person may buy the rights to use my art for their T-shirt and in the agreement it is stated that i earn 30% off of each sale, how will this work with taxes (again, shirt sales may vary with each week, therefore what i earn will vary)? I believe it has something to do with PAYG, however i'm unsure who will be responsible for setting that up. Will i be (the artist) responsible for that and how does that work?

 

If there is anything else i need to be aware of when it comes to being a freelance digital artist, please let me know.

Thank you!

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

ATO Community Support

Replies 0

Hi @EddyIII

 

As a sole trader you report all your income in your individual tax return, using the section for business items to show your business income and expenses. You will need to keep records of your business transactions throughout the year.

 

When you lodge your tax return your tax liability will be worked out. As you'll be receiving gross payments (with no tax withheld) you can put money aside for your anticipated tax liability and you can use our tax calculators to work out an estimate of what you should put away based on your earnings for a period. Alternatively, I encourage you to look into Pay as you go Instalments where you pay money to us each quarter (just like an employer does for employees). This will go towards you end of year tax liability.

 

You should also be aware of GST requirements. If your turnover is 75,000 or more you'll be required to register. Check our website for more information.

 

Hope this helps.

 

Thanks, Ari

 

1 REPLY 1

Most helpful response

ATO Community Support

Replies 0

Hi @EddyIII

 

As a sole trader you report all your income in your individual tax return, using the section for business items to show your business income and expenses. You will need to keep records of your business transactions throughout the year.

 

When you lodge your tax return your tax liability will be worked out. As you'll be receiving gross payments (with no tax withheld) you can put money aside for your anticipated tax liability and you can use our tax calculators to work out an estimate of what you should put away based on your earnings for a period. Alternatively, I encourage you to look into Pay as you go Instalments where you pay money to us each quarter (just like an employer does for employees). This will go towards you end of year tax liability.

 

You should also be aware of GST requirements. If your turnover is 75,000 or more you'll be required to register. Check our website for more information.

 

Hope this helps.

 

Thanks, Ari