I'm trying to evaluate an offer from a USA based company. Since they are small and do not have an Australian subsidiary to employ me, I will need to work for them as a contractor, and I'm trying to work out what all the overheads will be.

Does anyone know what the costs will be? For reasons too long-winded to explain, I don't have time to work this out properly, so need to make some very quick assumptions.

I figure the following...10% GST, annual fees for accounting and maintenance of shelf-company ($3K/annum), public liability, professional indemnity ($5K/annum)?

I'll be working from home. Is there anything else I need to know about?

What happened to training as a teacher?

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Mr Milk said..
What happened to training as a teacher?

It got gazumped!!

Donald is a twat

Charge them hourly rate in usd if short term due to exchange rate at current.
Public liability up to ehat value is what you need to figure out dependent on where you need to go.
Even if working from home different places require different public liability amounts and this changed associated insurance costs.
Ie council work or footpaths etc you used to need 5 million coverage which for a mate was like 10k a year but he also had a team he had to cover.
Sole contractor is a bit easier if your doing stuff from usa there are different electrical codes and stuff so their electric drawings are not always compliant and vice versa.
What are you doing??? Skill set wise?

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Razzonater said..
Charge them hourly rate in usd if short term due to exchange rate at current.
Public liability up to ehat value is what you need to figure out dependent on where you need to go.
Even if working from home different places require different public liability amounts and this changed associated insurance costs.
Ie council work or footpaths etc you used to need 5 million coverage which for a mate was like 10k a year but he also had a team he had to cover.
Sole contractor is a bit easier if your doing stuff from usa there are different electrical codes and stuff so their electric drawings are not always compliant and vice versa.
What are you doing??? Skill set wise?

Thanks Razz. It's a long term position, so I'm effectively working for an annual salary. The only reason for the contracting arrangement is that they don't have admin in place to employ someone in Australia. I need to give them a total amount that includes all overheads. I have the option of asking for USD or AUD, but that's not a long term gamble I wish to entertain.

Skill set is high level strategic power system and economics related, so I don't need to worry about detailed local codes.

Got ya harrow,

Car allowance tools of the trade, computer office space telephone line rental and insurance.
If you play it well try to get them to agree to a cost rise of 10per cent an annum (effected quarterly) in regards to the above costs and than enter into a fixed price.* Than try geoup a?l of these costs together with one buisness or bank to provide as many as possible, put the clamps on them and ask for cost reduction bundling package.
If no fixed price signed component is available tell them it is budget estimate only and applied quaterly.
This will help you keep on top of taxes if contracted. Even though it will be from home the car allowance will be required for many reasons. If you get close to proceeding and think its economically viable ot would be prudent to fork out 500 or so and see a tax lawyer (not an accountant)
It will also allow you to analyse what the real take home cash will be, it goes into a grey area in regards to buisness expenses that will be covered by the "company" paricularly if you require back of house or admin costs.
Contractor credit card allowance may be a big push but this may enable you to charge for expenses and ibviously will require coding and time but will free up your uncome if operating costs will only be re-imberssed by company sometimes this takes 30 plus days and in initial set up you may be a little short for a few months.
They will set kpi of some sort so its orobably best to understand total expectatuons prior to initial investment which may really be around 10k or so.

There are other things in regards to insurance which you can discuss with them and they may be able to provide medical coverage for you/family and insurance under company banner.
Whilst still a contractor you can cut a deal as a " company representative or preffered contractor which may alleviate some of the ongoing costs or set up.
If dealing with IP its important to note that most arrangements of this nature will include the "companies ri?ht" to any development projects or inventions you make during this time and as such will be owned by the company. This is ok and standard and most companies will not negotiate on this but again dependent on economic viability in your end it may be something you will entertain.
It would just be a bummer if you unvented the next cocktail umbrella and they ran with billions of them each year making 1c ..... different buisness model but you get my drift.

Thats about all i got but hope it makes sense

Jeez harrow, did you stick it up on the forum just to make us jealous or did you really need approval from the collective before you could make the decision??

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cisco said..
Jeez harrow, did you stick it up on the forum just to make us jealous or did you really need approval from the collective before you could make the decision??

I've basically got to cut majority of the deal in the next day or so (their Friday), and had very limited time to do any research. The whole thing came out of left field and took me by surprise. Hoping to gather as much intel as possible tonight from the seabreeze brains trust to take out the guess work tomorrow morning so I hopefully don't overlook something big.

If you register for GST, GST does not cost you anything. You get GST credit for anything you buy, and charge GST on any thing you invoice out. The credit difference goes to the Govt, if deficit you get back from govt. It depends on your turnover anything less than 100K+ it is not worth it.

From the other side of the fence, it is easier for a company to employ you as a contractor as all their admin, annual leave, sick leave, w'comp and superannuation doesn't get paid by them, so often they are looking to save about 30% on wages cost... Even though they don't have an aust office, it will still be a factor in their mind. Consider the cost of income protection insurance, s you wont have sick leave if you split your knee open on a reef..
so I would consider a reasonable wage and load by 15 % to account for the unknowns...

Think of a nice number, then add 75 or 100k for expenses. Job done

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Harrow said..

cisco said..
Jeez harrow, did you stick it up on the forum just to make us jealous or did you really need approval from the collective before you could make the decision??

I've basically got to cut majority of the deal in the next day or so (their Friday), and had very limited time to do any research. The whole thing came out of left field and took me by surprise. Hoping to gather as much intel as possible tonight from the seabreeze brains trust to take out the guess work tomorrow morning so I hopefully don't overlook something big.

By now you should have this job in the bag and on the way to financial freedom.. If you needed Intel from the SB brains trust then you may require and appointment with Centrelink instead. What does this fairy story job entail and why can't they employ some Indian or 3rd world country person who is cheaper than you to do the job and to not drift away ect

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kenhell said..
By now you should have this job in the bag and on the way to financial freedom.. If you needed Intel from the SB brains trust then you may require and appointment with Centrelink instead. What does this fairy story job entail and why can't they employ some Indian or 3rd world country person who is cheaper than you to do the job and to not drift away ect

I have always been an employee, so I knew absolutely nothing about this stuff until yesterday. A meeting with an accountant yesterday arvo gave me a lot of info, but not everything that I needed to know. (Short time frame and weekend did not help). I know there's a lot of diverse life experience on SB, so why not ask here? I asked a couple of other friends also, but it's interesting that while 95% of what people have told me is the same, it's the 5% of different information from each source that is valuable. A couple of practical points and perspectives given here were actually quite helpful. Thanks guys.

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myusernam said..
Think of a nice number, then add 75 or 100k for expenses. Job done

Or just add 75 and 100 (and round up to the nearest 100 to be safe)...

Hi there ive done several contracting offshore jobs as a fully contracted safety advisor in the NWest WA short notice and longterm Contact these people they handle the lot recieve your income set it up with employer / pay your tax / insurance / provide electronic payslips sort your super etc etc etc etc real easy and just stress free all done for you no problems ( worked out at approx 1200 per year they took a percentage and it was the best move i very made fee tax deductable etcetc etc LESTER ASSOCIATES L4 lavender street milsons point NSW 1565 australia po box 410 Ph 0299568228 Fax0299568499 my fee is you find out if there is safety jobs let me know and give me a contact for job / company / jelous have not seen that type of money in the last 3 years since darwin gas pipeline job PM me

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JulianRoss said..
Consider the cost of income protection insurance, s you wont have sick leave if you split your knee open on a reef..

And don't be stingy on the income protection cover either.

Generally, most "stand alone" income protection policies are a tax refund - so in effect cost you nothing.
Generally, policies tied to your superannuation are bleeding your super, and the premiums are most likely a bit rich anyway.

Speaking from experience, income protection is gold, mine saved our necks big time.