Workers compensation insurance

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Heli_Al
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Workers compensation insurance

Postby Heli_Al » Fri Feb 14 2014, 23:41

Hi people,

I am hoping someone can help me please.
So I am a non Australian citizen (Kiwi) and I am working in Australia part time for a few months , the issue is if I want to contract to this particular company I need "workers compensation insurance" but to do this I need to be a company myself as they wont insure sole traders.
Or I get employed by this company and pay the 45% tax rate that a non Australian citizen has to pay.

I have no problem paying tax , just thought 45% (plus super fund) was really high and was hoping someone else has been through this before and could maybe give some advise.

Do I start a company for the little time I will be here just to get the insurance , is it worth its ?

Is there a way to pay the tax in NZ and get some other insurance as a sole trader ?

Any help is much appreciated

I do have professionals looking in to this for me as well , just thought I might be able to fast track it with the help of you lot.

Cheers
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Planner
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Posts: 57
Joined: Feb 2013

Re: Workers compensation insurance

Postby Planner » Sat Feb 15 2014, 07:14

Heli_Al wrote:Hi people,

I am hoping someone can help me please.
So I am a non Australian citizen (Kiwi) and I am working in Australia part time for a few months , the issue is if I want to contract to this particular company I need "workers compensation insurance" but to do this I need to be a company myself as they wont insure sole traders.
Or I get employed by this company and pay the 45% tax rate that a non Australian citizen has to pay.

I have no problem paying tax , just thought 45% (plus super fund) was really high and was hoping someone else has been through this before and could maybe give some advise.

Do I start a company for the little time I will be here just to get the insurance , is it worth its ?

Is there a way to pay the tax in NZ and get some other insurance as a sole trader ?

Any help is much appreciated

I do have professionals looking in to this for me as well , just thought I might be able to fast track it with the help of you lot.

Cheers


Hi Heli Al,

If you don't mind me asking what state will you be employed in? Rules do vary between states.

Planner.
Heli_Al
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Posts: 17
Joined: Jan 2011

Re: Workers compensation insurance

Postby Heli_Al » Sat Feb 15 2014, 10:12

Tasmania
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Planner
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Posts: 57
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Re: Workers compensation insurance

Postby Planner » Mon Feb 17 2014, 01:08

Hi Heli Al,

I have had a look at some research and run it by one of the accountants here in the office and I think your choices are limited.

As I understand it you have pretty much hit it on the head with your choices available:

1. Set up a company, invoice for services and be an employee of that company. This imposes other requirements such as setting up a Tax File Number, ABN, potential GST registration and compliance costs for getting tax returns/financials completed by your accountant. Not to mention that you will need to pay workers comp on your salary paid from the company. Then this would possibly be taxed at 45% anyway (and 9.25% super)! Add in that you will be a non-resident company and it all gets very complex.

2. Go the easy route and become an employee and let them pay the workers comp cover. You will be taxed at non-resident rates but don't forget that you will get this as a tax credit in NZ. We don't keep it here so you don't just lose that 45%. It will be applied as a credit when you do your NZ tax return. Does nothing for your short term cash flow though.

Your super may also have to stay here although there are some new rules that came into force on 1 July 2013 that could allow you to transfer the super account back to NZ. I am yet to see one of these so haven't researched that yet.
Sorry that I couldn't give you an easy way out. Your accountant will give you a more detailed analysis no doubt but this is how I understand it.

Regards,
Planner.
Heli_Al
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Posts: 17
Joined: Jan 2011

Re: Workers compensation insurance

Postby Heli_Al » Mon Feb 17 2014, 06:49

Hi Planner ,

Thanks a lot for the advise it is much appreciated and you almost spoke word for word like my accountant .
Just for others info though , I have found that if you apply for a TFN and your not a citizen of Australia you only pay 33% , where is if you don't apply then it's 45%.
Pretty sure that's right , it does get a bit confusing though.
Workers Compensation insurance is between 10 - 13% of your income.
I also think that if you earn a lot in a short period like on fires then you get taxed at a high rate to start with , until end of year when they see your annual earnings is not that much , it just seems a lot if your just here for fire season .
Thanks again Planner

Cheers Al

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