Originally Posted by
Aussie Bob
So it works a bit differently if you have a company. I do. Let's call it AB Pty Ltd.
Aussie Bob, as a representative and director of AB Pty Ltd offers the services of a pilot to Joe Jumpalot skydivers for $90.00 per flying hour. Joe agrees.
Joe gets invoiced by AB Pty Ltd for 10 hours piloting in the first weekend, $900.00
Joe pays the invoice to AB Pty Ltd
Aussie Bob decides to work for next to nothing and takes out of AB Pty Ltd as a wage, $200 per week. This is below the tax threshold and no super contributions are required.
AB Pty Ltd now has a bit of money in the kitty and can buy some assets. Perhaps a car, or a plane or whatever.
AB Pty Ltd has only one employee who happens to be the director.
On it goes, totally legally. Come tax time Aussie Bob has not earned a taxable income and owes no super. He doesn't give a fig that there is no insurance or super anyway, all is good in his world. He has had fun and put food on the table.
A simplistic way of putting it, but its totally legal and the way of many. What we hope as company directors is that by the time retirement comes around, the company has enough assets or is saleable to fund said retirement.
If the company earns enough then company tax is payable. In some instances it is less costly to pay a dividend to the the director to lessen the company tax bill and this dividend goes on the directors income so is taxable.
After all that I am lost and need an accountant and an accountant to do the company return is a legal requirement for a Pty Ltd company as far as I am aware. I use one.
Enlighten me as to how having no super is a
good thing?