Academic Enrichment Services Careers & Employment

Self-employment

What do I need to do if I am considering becoming self-employed?

Self-employment is a career choice available for anyone who has specific expertise, knowledge and resources which they are willing to exchange for profit. It presents an alternative to paid employment. For example:

  1. Information technology / computer science students may wish to offer computing services.
  2. English and linguistics students may find a niche market in the corporate world offering their skills as communications and report-writing consultants.
  3. You can present tenders in any area where you have specialist skills, knowledge and formal education.

While starting your own business may provide a level of independence, you also have more responsibilities than you would as an employee. This page will outline some of the things that you should consider before starting your own consultancy / small business.

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Some matters to consider

1. Registering your business name

If you are going to trade under a business name (eg, Alex’s Tutoring Service), you need to register it. If you are going to trade under your own name (eg, Alex Smith), you are not required to register a business name.

Forms to register a business name are available from the Consumer Affairs website.

2. Australian Business Number (ABN)

All trading businesses will require an ABN. If you do not have one, your suppliers or clients may be obliged under law to withhold 48.5% of payment to you on behalf of the Australian Taxation Office. You can apply for an ABN at the Australian Business Register.

3. Goods & Services Tax (GST)

If your business earns less than $50,000 per year, there is no need to register or charge GST on your sales / services.

If your total gross income exceeds $50,000 per year, you are required by law to register for GST. This means that you will have to charge 10% GST on all of your sales, but you can claim back any GST that your business has paid in purchasing products or services. More information is available at the Australian Taxation Office.

4. Insurance

To protect your business, you may wish to consider taking out insurance, such as professional indemnity, public liability, product liability, loss of profits, property, fire, or life insurance. Contact an insurance broker or insurance company for advice on your particular needs.

You will need to take out WorkCover insurance if you employ people in your business and the total amount paid to employees exceeds $7500 per year. You may also need to take out personal accident insurance for yourself, as many people will not give work to business contractors who are not covered by WorkCover, unless they have their own personal accident insurance. For more information, contact WorkCover.

5. Superannuation

If you employ people in your business, you are required to pay superannuation contributions, equal to 9% of the employee’s salary, into an eligible superannuation fund (if the employee earns $450 or more in a month). You will also need to consider contributing to a superannuation fund for yourself. For further information, see the Australian Taxation Office.

6. Seeking professional advice

Accountant: At some point you will need to consult an accountant in order to set up a recording system that will satisfy the Australian Tax Office. Accountants can also advise on setting up company or business structures.

Solicitor: If your business structure is a partnership, or you have any specific legal issues in connection with your business activities, then you may need the services of a solicitor. Solicitors are able to formalise business agreements, or any other legal issues that are relevant to your business, such as intellectual property, trade marks, or patents.

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Further information

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