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Freelance worker - how does GST work?
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8 replies to this topic

#1 Bondia

Posted 10 February 2011 - 09:15 PM

Ok - I'm TOTALLY new at this and could really use some help!!! Hopefully these are very easy questions!

I did 2 hours' copywriting work this week for a large organisation, and they agreed to pay me an hourly rate. I am to invoice them for the work. (Their words: "You will need to send us a Tax Invoice ie GST and your ABN number")

I have an ABN (from many years ago which I haven't used yet but is still active).

So - What do I do now?

Do I just make up an invoice document with the total amount?
Or do I need to write something on the invoice to do with GST?
Would I just write the total amount and put "Including GST"?

(I really don't get the whole GST thing, although I know I don't need to 'register' for it unless I earn $75k - which I won't).

Presumably then I just include this amount as part of my income during tax time? Or do I need to do some sort of other tax documentation (BAS or something?)

Is there anything else I need to do? Or know?

I may do more of this kind of work so I want to make sure I understand what I need to do. I've been looking online but I confess a lot of the businessy stuff has gone over my head!

Any help greatly appreciated!

Thks.

#2 Georgette47

Posted 10 February 2011 - 09:25 PM

The invoice needs to include the words 'Tax invoice' on it.
Just charge for the total amount - e.g. 2 hours @ $xx per hour.
Don't charge for, include or mention GST at all. If you are not registered for GST you can't charge for it - which makes things heaps simpler for you!

Good luck with the work.

#3 *purple*

Posted 10 February 2011 - 09:28 PM

You need to be registered for GST in order to send tax invoices. If you are not registered for GST you can just give them an invoice (not a tax invoice) and note at the bottom that no GST has been charged.

You will need to put your abn on the invoice though.

#4 Bondia

Posted 10 February 2011 - 09:31 PM

*purple* the organisation has specifically requested a "TAX INVOICE ie GST and your ABN"....

Does this mean I need to register for GST?

Aargh. Sorry - confused!

#5 *purple*

Posted 10 February 2011 - 09:52 PM

Yes you will need to be registered for GST in order to issue a 'tax invoice'.

You can't charge GST unless you are registered for GST.

This is an example of how to set out invoices and tax invoices. original.gif

http://www.ato.gov.au/content/downloads/n11675.pdf

Edited by *purple*, 10 February 2011 - 09:57 PM.


#6 colby01

Posted 11 February 2011 - 08:28 AM

QUOTE (*purple* @ 10/02/2011, 10:52 PM) <{POST_SNAPBACK}>
Yes you will need to be registered for GST in order to issue a 'tax invoice'.

You can't charge GST unless you are registered for GST.

This is an example of how to set out invoices and tax invoices. original.gif

http://www.ato.gov.au/content/downloads/n11675.pdf

I agree with Purple. I am a freelancer and unless you are registered for GST - which isn't necessary unless you earn over $75k - you only need to supply an invoice with your ABN number. I have sent invoices to government departments without GST and haven't had a problem, you just need to explain that you aren't registered for GST.

#7 Indi

Posted 04 March 2011 - 03:13 PM

Even though you may not be earning $75,000 why don't you want to register for GST?  What happens to any business purchases you make?  You can't claim the GST back on them.

BAS statements are not hard at all if your business is simple.

#8 Amysha

Posted 25 March 2011 - 11:46 AM

Sometimes it's just not worth it for the little you earn or the small expenses to register for the GST.  I'm still not registered. I have always just issued an "Invoice" (NOT a TAX invoice) with an ABN and down the bottom put GST $0.00 or no GST has been charged.

You do not have to supply a tax invoice, they have probably just said it as terminology meaning they want legit paperwork. So long as you have quoted an ABN that is all they care about because that's all they need.

ATO has a good example of how to lay out invoices depending on your gst status
http://www.ato.gov.au/businesses/content.a...p;page=1&H1

#9 Gangnam Style

Posted 25 March 2011 - 11:52 AM

Check that your ABN is still current, and what your GST status is on your  entry on ABN lookup:

http://www.abr.busin...y4ybjhed...yyrm)/main.aspx








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