by Rachel Smith
08 June 2016
I was wondering if anyone has any experience working for an overseas employer who wants to pay you via PayPal? The company is in the US and is legit, I just don’t know how it all works on my end as far as tax etc. The pay is ridiculously low, only about AUD$10 and hour, but it’s easy and quick, and I can do it from home. Any insights? S
I’ve worked for a number of overseas employers, including some who are based in Australia but pay via their parent company (based in the US, usually). According to my accountant this type of work comes under ‘offshore payments’ and you’re not required to charge GST for it (if you do normally). I still take out the usual 30 percent tax from the payments and send it to a separate account for BAS / tax time, but my accountant reconciles it all at the end of the tax year.
I would make sure you invoice the company (via Paypal, the invoicing system is easy to use) so you have a record of the work come tax time. But if you’re not charging GST, as you don’t with offshore payments, the invoice shouldn’t read ‘Tax invoice’ as it would if you were invoicing an Australian company, and charging GST – it should just read ‘invoice’.
If you think the company’s ok and you’re invoicing via Paypal I’d just keep track of those invoices like you would normally, siphon the tax into a separate account and let your accountant reconcile it all for you at the end of the tax year. Just be aware that Paypal do take a cut of your earnings and those little deductions can add up, too. So, if there’s an option to give the company your SWIFT code and have them pay you directly into your bank account, that might suit you better going forward.
Of course, as a disclaimer please know I’m not an accountant or a laywer and you should get expert advice about all of the above!
List members… are you finding you’re doing a lot more offshore work? How do you get paid?
