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A quick non boating question....if I may


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For those that are working for themselves, do any of you have any idea of what you have to earn, to be equal to what a wage would be equal to if you worked for someone else.
In otherwords, when we work for ourselves, we have a higher tax rate, provisional tax, ACC, Insurance and Accountant costs.
I will leave out the cost of Rent and Insurance ob a building as that is too open ended,

 

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At a guess I’d say at least 20% more, maybe even 25%

However you can put a percentage of your household costs as businesses expenses if you have a good accountant, but that’s another expense

Maybe it’s 30 but should really be 50% more as you also need to factor in holidays

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as a self employed contractor you need to be payed around 30 to 35% more than a wage earner to end up the same at the end of the year (holidays,the odd sick day stats acc levies cost of accountancy etc). There will be a bit of a variation if the wage earner is regularly on penal rates.I have a spreadsheet that shows the costs and comparisons of being self employed (albeit 10 years old) that i can pm to you if you like wheels.There is a lot of bigger picture stuff involved too like whether you are looking at a short or long term prospect and even how much it would cost to get to work, and if you like record keeping and paperwork...

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Thanks guys. Those figures are about spot on to what I was thinking. I was trying to argue this with a guy and told him that if he is currently earning say $50K on wages and wants to keep that kind of income while working for yourself, you need to earn about $100K. I also said that if he was not earning $80K, he may as well go work for minimum wage for someone. He is currently setting his max earning at $60K because he doesn't want the hassle of GST. I told him he is wasting his time.

I also told him that yr 2 is the real killer for most newbies because if you did well in year 1, you will have provisional tax kick in in yr2 and often a large tax bill to pay if you haven't set aside money for tax. It is not easy these days, as all you self employed already know.

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in the industry I am in(trucking)I do not get why you would want to be an owner driver with all the expenses.When a wage/company driver can earn $80k  easily + holidays ,time n half on stat days + sick days  and dont care about the gear they driving.

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I wish drivers would care about the gear they were driving......the longer it lasts, the more I can pay them.....

exactly our temps do not care,luckily now I have my own dedicated daf+trailer,the hours I work it cannat be used by anyelse but when on holiday it comes back a pig sty.

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