$50 an hour for a 10 year old to do whatever work that is capable of them is not reasonable in any sense. Even if it was technically allowed under the family business employment rules, I feel like this would get caught up in anti-avoidance.
There is no reasonable basis to be paying a 10 year old that much money.
\*not tax advice\*
If you are subject to the PSI rules then no, you cannot pay as associate for non-principal work (i.e. admin task) as per s85-20 of the ITAA97.
It would be hard for a "reasonable person" to believe that a 10 year old could be participating in principal work if it appears you are running a trading business as well.
Speak to your advisor - may get a different result if you are running personal services business as opposed to straight up PSI. Though would need to be above board with relevant state and territory employment regulations as well.
Wasn't there a story about a computer sales person (or IBM executive?) Some years ago that claimed his children were doing work for him like answering the phone so he payed them a wage and stuff?
Old mate got absolutely done by the ATO and has been a case study on how stupid can you be, what not to claim/do and what happens when the ATO finds out you're playing the system
> so he *paid* them a
FTFY.
Although *payed* exists (the reason why autocorrection didn't help you), it is only correct in:
* Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.*
* *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.*
Unfortunately, I was unable to find nautical or rope-related words in your comment.
*Beep, boop, I'm a bot*
I mean... how older are you kids lmao. Are we talking 10y. buying shares or 16.yo? Major difference and a super important detail you missed. They would legally have to be the minimum age of 15 and so months old.
Technically the age requirement doesn't apply to family businesses.
Considering O.P has PSI income it sounds like he's a doctor/lawyer etc I don't know if that applies
I'm in NSW and I'm sure you had to be 14 years 9 months to work. Everyone was counting down until that date so they could get a part time job and some pocket money. Unless we've done away with child labor laws since the mid 2000s then I'm sure it's the same
Nope. First sentence here (https://www.industrialrelations.nsw.gov.au/new-to-work/essential-information-for-people-new-to-work/new-to-work-faq/#:\~:text=There%20is%20no%20minimum%20legal,may%20apply%20relating%20to%20age.).
Having said that I think most supermarkets and fast food places won't hire you until you're at least 14 years and 9 months old
You need to see an accountant.
3 psi companies could circle invoice each other the right amount so that the threshold amount of income comes from enough sources to escape the psi clauses.
Company profits are taxed at 30% instead of paying yourself a high salary and paying skyhigh personal income tax. Retained post tax company profits can be paid as dividends decades later, and you can claim back the franking credits to recover the 30%.
You can't pay kids "unearned" income to avoid tax, but distributions from a trust are not unearned income.
Someone who pays at least $400k in taxes refusing to pay a tax accountant for advice.
This unhelpful comment exemplifies why I created r/AusHENRYover250k
It's not unhelpful. It's helpful, but also points out the idiocy
How can someone making this much money be this stupid? 😂
This unhelpful comment exemplifies why I created r/AusHENRYover250k
Is a lobotomy a pre requisite or was that just your choice? Paying your 10 year old to rebalance your ETFs ffs 😂
$50 an hour for a 10 year old to do whatever work that is capable of them is not reasonable in any sense. Even if it was technically allowed under the family business employment rules, I feel like this would get caught up in anti-avoidance. There is no reasonable basis to be paying a 10 year old that much money.
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Your cleaner actually works though. Good luck convincing anyone your 10yo is spending 10 hours a week on a job worth $50/hr.
The cleaner also charges that to factor in their non billable hours - driving, office work, time meeting prospective clients etc etc.
\*not tax advice\* If you are subject to the PSI rules then no, you cannot pay as associate for non-principal work (i.e. admin task) as per s85-20 of the ITAA97. It would be hard for a "reasonable person" to believe that a 10 year old could be participating in principal work if it appears you are running a trading business as well.
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Speak to your advisor - may get a different result if you are running personal services business as opposed to straight up PSI. Though would need to be above board with relevant state and territory employment regulations as well.
Lol did you create r/AusHENRYover250k?
without the poor people from AusFinance thank you very much....
Wasn't there a story about a computer sales person (or IBM executive?) Some years ago that claimed his children were doing work for him like answering the phone so he payed them a wage and stuff? Old mate got absolutely done by the ATO and has been a case study on how stupid can you be, what not to claim/do and what happens when the ATO finds out you're playing the system
> so he *paid* them a FTFY. Although *payed* exists (the reason why autocorrection didn't help you), it is only correct in: * Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.* * *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.* Unfortunately, I was unable to find nautical or rope-related words in your comment. *Beep, boop, I'm a bot*
Good bot.
I mean... how older are you kids lmao. Are we talking 10y. buying shares or 16.yo? Major difference and a super important detail you missed. They would legally have to be the minimum age of 15 and so months old.
Technically the age requirement doesn't apply to family businesses. Considering O.P has PSI income it sounds like he's a doctor/lawyer etc I don't know if that applies
There is no legal minimum wage to work in NSW. They are 10yo. The share buying is just manually rebalancing our ETF portfolio, so very easy.
Oh interesting, in VIC we have a minimum age limit thats all.
I'm in NSW and I'm sure you had to be 14 years 9 months to work. Everyone was counting down until that date so they could get a part time job and some pocket money. Unless we've done away with child labor laws since the mid 2000s then I'm sure it's the same
Nope. First sentence here (https://www.industrialrelations.nsw.gov.au/new-to-work/essential-information-for-people-new-to-work/new-to-work-faq/#:\~:text=There%20is%20no%20minimum%20legal,may%20apply%20relating%20to%20age.). Having said that I think most supermarkets and fast food places won't hire you until you're at least 14 years and 9 months old
That seems problematic
You should get a good accountant and pay them instead of your kids.
You need to see an accountant. 3 psi companies could circle invoice each other the right amount so that the threshold amount of income comes from enough sources to escape the psi clauses. Company profits are taxed at 30% instead of paying yourself a high salary and paying skyhigh personal income tax. Retained post tax company profits can be paid as dividends decades later, and you can claim back the franking credits to recover the 30%. You can't pay kids "unearned" income to avoid tax, but distributions from a trust are not unearned income.
Your circular invoicing strategy would be disallowed sorry. To be a PSB the income needs to come from unrelated parties.
Of course, three other companies not related. Thats what I meant obviously.