Did you know that one in five Australians work in and earn money through the share economy? Ever wondered how are those people taxed? No worries. Syndeo Group – one of the best and well-experienced companies offering financial assistance in Queensland – is here to help and explain everything for you.
But first, let’s begin by explaining what exactly the share economy is.
The Basics of Share Economy
Namely, the share economy is actually a marketplace where services are offered in exchange for money. Usually, a technology company plays the role of a third-party and provides a marketplace where buyers and sellers can meet and reach an agreement. However, there are certain guidelines or a set of rules that need to be followed.
And, logically, the tech company takes a percentage of each transaction for providing a digital marketplace. Popular examples of such include Airtasker, Uber, Deliveroo, Airbnb, Menulog, etc.
Australian Share Economy Tax Rules
According to the Australian tax rules, money earned from a share economy and a normal salary job is exactly the same. The ATO (Australian Taxation Office) doesn’t define any difference between these two and considers both of them assessable for tax purposes.
But, how much will you be taxed? That depends on the total amount you earn from your typical job salary and from the share economy work. The tax obligations will be calculated based on the combined income. Feel free to ask any Syndeo Group accountant for any additional help.
How to Manage Share Economy Taxation Easily?
As we already mentioned, the ATO considers every share economy income as taxable, without exceptions. Yet, unlike a salary job where you are obliged to pay tax every week, in the share economy you actually pay taxes once a year when tax time comes around.
Therefore, Syndeo Group accountants advise you to save 30% of the income you earn through share economy up front since the average tax rate in Australia is about 25-30%. By doing so, you can easily manage and cover your tax obligations when the time comes. So, prepare for the tax season and save each week to avoid getting caught out with a huge tax bill.
And, don’t try to hide your income from ATO and the Government since there are specific rules requiring all marketplaces to share their user data so that they ensure fairness of the tax system. In other words, the ATO can easily check and verify the right amount of your share economy income.
The Share Economy Tax Deductions
Luckily to all of you who earn money through the share economy, you may also be eligible to claim tax deductions depending on the type of income you earn. For example, if you use your mobile phone or car for any share income purposes, tax deductions may be available. And, remember to keep records and receipts to prove expenses were actually incurred or that income was earned. Just make sure you consult one of the Syndeo Group accountants to check what you can and can’t claim as a tax deduction.
Regardless of the type of share economy job you earn money through, Syndeo Group can help you. Just let our expert accountants advise you and ensure you do all the work right. Don’t hesitate, contact us today!