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dudleygb's avatar
dudleygb
Contributing User
3 years ago

Newbie Sole Trader (IT Contractor) high level setup pathway

Hello all, Yes, another newbie here :) I am going through a lot of material/training/wiki/howto/videos etc etc, but I have a few questions on how to proceed, in my specific case.   I recently...
Tracey_H's avatar
Tracey_H
Former Staff
3 years ago

Hi dudleygb 

 

My apologies for the delay in getting back to you. I can't provide any advice on how these transactions need to be recorded as we're not permitted to provide accounting advice. It also depends on your specific situation. 

 

Generally speaking, you'd record an invoice for services provided and allocate the total amount to an income account and select the GST tax code. The GST amount is automatically posted to the GST account. Super and income tax wouldn't be allocated on the invoice, they would be separate transactions recorded when they are paid.

 

Your accountant doesn't need to be familiar with MYOB, I'm happy to help you with entering transactions. But, he will need to tell you:

  • does the employer need to pay your super or is that your responsibility
  • should you include super as a separate charge on invoices
  • should the total invoice be allocated to income
  • are you set up to pay PAYG instalments

If you can get me that information I'll be happy to help with entering the transactions in the software.

 

If my response has answered your enquiry please click "Accept as Solution" to assist other users find this information.

dudleygb's avatar
dudleygb
Contributing User
3 years ago

Oops sorry I forgot to answer those items:

 

Your accountant doesn't need to be familiar with MYOB, I'm happy to help you with entering transactions. But, he will need to tell you:

  • does the employer need to pay your super or is that your responsibility - I am paid an amount that includes super, its not indicated on my invoice but it is on my services agreement with the client I am working for. So, in short, yes, Super is my responsibility. 
  • should you include super as a separate charge on invoices - it is default arrangement as per my services agreement that it is included in every amount I get paid. So doesn't need to be a seperate invoice item by default.
  • should the total invoice be allocated to income - I beleive I am to allocate GST, Super and income tax on the gross figure I get paid, and the balance I allocate as salary/income, I can spend. The GST will be allocated to the GST liability, SUPER will be allocated to a seperate income category 10.5%, we will create this item so it can be allocated to. Same with income tax, but it is liability, as in, I need to pay it out to ATO. Sound about right?
  • are you set up to pay PAYG instalments - I am not, but I assume I need to have something to allocate income tax to, and it appears as per ATO website that I will pay this income tax over during tax return time. GST is paid quarterly. 

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