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Hi there,
A quick question for setting up a sole trader while employed.
Are NZ allow to set up a side business as a sole trader and at the same time I was employed by other company? ( of course PAYE)
If any lost of profit on my side business can it be able to offset my PAYE?
What kind of "NZ" are you asking about? - work visa holder, resident, citizen...?
As long as you have an IRD number you can become a sole trader with the following restrictions:Quote:
Originally Posted by reevelau.nz
- if you have a visa (like previous poster mentioned) that it allows you to do this
- your employment agreement allows it. Often its a good idea to let your manager know you are doing something on the side to avoid any conflicts of interest / loss of trust down the line
Things to watch out for:
- you will have your own ACC levy to pay
- you will be fully liable for any mistakes you make (as opposed to a limited liability company) so depending on work type you might like to get insurance
- its a good idea to have a book keeper help you get used to tracking expenses, deductibles and filling out your tax returns.
- have your own dedicated bank account / credit card etc for biz related expenses helps alot
- once you are making some money look at using xero or myob to make your accounting easier
- if you are GST registered and not making a profit you can get GST refunds (of course, once you start making a profit you have to pay GST)
- you can claim some amount of your home office as an expense against your income. But this is normally offset by book-keeping, accounting, ACC costs so can be of marginal benefit
When I've done sole trader for myself in the past once I added up all the extra work I had to put into tracking costs, accounting advice etc I worked out I was only making $2/hr. But then - I learnt heaps about biz expenses etc so there is that.
Hi there,Quote:
Originally Posted by JandM
I am in PR visa, currently working and PAYE.
Just wonder if loss profit from the side business can it be able to offset the PAYE, in order to minimize the risks.
yup. 50% phone costs and a percentage of any other related costs based on how much room your home office takes up.
To see a summary of how this works check out https://www.bdo.nz/en-nz/insights/co...ffice-expenses