Earning $185K + $1.2K/week side hustle—best tax strategy with ABN?

R

ripmatisantix

New Member
Hey everyone!

I'm super excited because I'm currently working a full-time job making around $185,000 plus PAYG, and I've got this awesome opportunity for a side hustle that could bring in about $1200 a week. The thing is, I'll need an ABN for it. So, I'm really curious—what’s the absolute best way to handle the tax side of things? And honestly, is it really worth all the extra effort if you end up with only half of that cash in your pocket?
 
Honestly, this stuff is probably a job for an accountant they live for this kind of headache! If you want, I can give you my guy's details seriously, he knows his stuff and doesn't put you to sleep explaining it.
 
Before you start, I recommend speaking with an accountant to fully understand your tax obligations when working with an ABN and PAYG. The way you asked this question suggests you lack the knowledge to operate on an ABN without risking tax issues this isn't meant to belittle you, as most people don't. You should educate yourself correctly using professionals, not Facebook posts.
 
As a sole trader, your tax combines with PAYG.

Companies pay a 30% tax rate.

This 30% rate is lower than the 42% PAYG rate.

Companies cost more to set up and run.
 
Could a side business grow by keeping all its money in the company, buying assets, and then drawing an income in retirement while paying income tax on it? But you only pay 25% if the money stays in the company.
 
Hey, you could potentially set up a company and keep the profits there instead of paying them out to yourself.

Just be sure to double check with an accountant!
 
So, here's a thought you could start a company and have it buy everything you need. You'd try to keep the company running close to a loss, which helps in reducing your taxes. You wouldn’t take a wage, but you could sell your car to the company, right? Then, the company owes you money, and when you get that money back, it’s tax free since it’s just repayment.

Oh, and it’s probably a good idea to chat with an accounntant about this.
 
Hire a good accountant. Minimise company tax. Contribute the maximum to your super. If your partner earns less, distribute profits to them. Leave profits in the company only as a last resort. This keeps cash idle.
 
Anyone who thinks they can get away with taking cash without reporting it is flirting with financial ruin. The ATO will slam you with a crippling tax bill, backpay, and devastating penalties the moment they catch you. Playing by the rules is the only smart move anything else is pure recklessness. I've watched friends destroy their finances by trying to cheat the tax system, and they paid the price.
 
If you earn $185,000, you are already in the highest tax bracket. Your average tax rate will be around 33% to 35%. Yes, the rate increases after $120,000, but due to the tax free threshold and the progressive scale, that is the average.

With an ABN, everything is electronic. You must pay what you owe. The tax office knows if your ABN is active. If you do cash jobs and don't report them, they will cancel your ABN for no activity after a period.

Create a spreadsheet to track your ABN income and tax. Set aside 35% in a separate account for tax. When it's time t file, you will be prepared.

An accountant gave me this advice. You can take it or leave it.

(I earn over $200,000 from my job and recently started doing trade work through an ABN on the side.)
 
Got a spouse with lower income? If so, maybe think partnership

Or set up a company instead, keep the profits there for now – pay less tax Could use that cash for investing, not personal stuff.

Also, leaving money in the company is like rainy day savings Then you only pay tax later when you actually need the funds.
 
Have you ever considered what Tax Secrets of the Rich might reveal?
Could exploring the potential of real estate uncover new avenues for income and unexpected tax advantages?
 
At 185k you're paying 29% tax on average, but honestly every extra dollar you earn after that's gonna push your average tax rate up faster bc now you're in the 48% bracket. So imo it's up to you what's worth it maybe earn like 15k more then lay off, idk.
 
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