Contracting Advice

marco79

marco79

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I'm not sure what to call this thread, but need advise on going the contracting route.

I am currently on a fixed term contract with a company. Been here just under 3 years. So I get a fixed salary and claim monthly mileage.

A few years ago I worked with someone who was employed as a contractor. He issued a monthly tax invoice for all his expenses. This actually worked out more favorably for him.

I am looking to find out more about this. I am considering a move to another company as my technical skill is a shortage at the moment.

I assume I have to open a CC, have a tax clearance and get an accountant. The main reason for going this route is so I could one day grow this CC and maybe employ someone with the same technical skills and hire them out to consultants.

I hope I'm making sense, any advise or pitfalls would be appreciated.
 
Remember to factor in all the costs of contracting though. No paid leave, no bonuses etc.
 
First thing to know is that you cannot register CC's anymore.

You could still maybe find an off-the-shelf cc (pre-registered) if you look hard enough.

It is a PTY or trading as being the only choices now.
 
Hamster said:
Remember to factor in all the costs of contracting though. No paid leave, no bonuses etc.
Click to expand...

I already get no bonuses. I only get 15 days paid leave p.a. That would make my rate 5% more per month to make up for it.
 
ITCynic said:
First thing to know is that you cannot register CC's anymore.

You could still maybe find an off-the-shelf cc (pre-registered) if you look hard enough.

It is a PTY or trading as being the only choices now.
Click to expand...

I'll look into this, thanks.
 
ITCynic said:
First thing to know is that you cannot register CC's anymore.

You could still maybe find an off-the-shelf cc (pre-registered) if you look hard enough.

It is a PTY or trading as being the only choices now.
Click to expand...

are cc's better taxwise?
 
I work as a self employed individual. So I invoice monthly in my personal capacity and pay provisional tax every 6months (NOT PAYE). In my case I deduct a lot of expenses because I work from home and have a dedicated home office. So my taxable income is relatively less than what it should have been if I worked full time for a company and the same salary.
 
marco79 said:
I'm not sure what to call this thread, but need advise on going the contracting route.

I am currently on a fixed term contract with a company. Been here just under 3 years. So I get a fixed salary and claim monthly mileage.

A few years ago I worked with someone who was employed as a contractor. He issued a monthly tax invoice for all his expenses. This actually worked out more favorably for him.

I am looking to find out more about this. I am considering a move to another company as my technical skill is a shortage at the moment.

I assume I have to open a CC, have a tax clearance and get an accountant. The main reason for going this route is so I could one day grow this CC and maybe employ someone with the same technical skills and hire them out to consultants.

I hope I'm making sense, any advise or pitfalls would be appreciated.
Click to expand...

If you are working for one company you will be deemed a "personal service provider"...
 
adidas said:
I work as a self employed individual. So I invoice monthly in my personal capacity and pay provisional tax every 6months (NOT PAYE). In my case I deduct a lot of expenses because I work from home and have a dedicated home office. So my taxable income is relatively less than what it should have been if I worked full time for a company and the same salary.
Click to expand...

This is exactly what I am looking at doing. What would the difference be between this and registering a PTY and doing it through the company?
 
ITCynic said:
First thing to know is that you cannot register CC's anymore.

You could still maybe find an off-the-shelf cc (pre-registered) if you look hard enough.

It is a PTY or trading as being the only choices now.
Click to expand...

Trading as is gone as of fairly recently. PTY or sole proprietor.

CamiKaze said:
The cheapest CC that you will find today is going to cost you 8k.
It's not worth it, and you don't need an accountant if you do the books yourself.


Follow this, @Tey helped me with mine and it cost me about R175 IIRC.

http://mybroadband.co.za/vb/showthread.php/764020-CC-or-PTY-LTD?highlight=
Click to expand...

Swiftreg offers a great service and you can register a PTY for around R500.

You should probably find a book keeper and ensure that you keep your nose clean with regard to taxes.
 
adidas said:
I work as a self employed individual. So I invoice monthly in my personal capacity and pay provisional tax every 6months (NOT PAYE). In my case I deduct a lot of expenses because I work from home and have a dedicated home office. So my taxable income is relatively less than what it should have been if I worked full time for a company and the same salary.
Click to expand...
My situation is similar, but I work through my CC that I kept from back in the day when I ran a dev house.
Works out extremely favourable for me.
I pay R800 PM for an accountant that takes care of SARS etc...

It works out very well in my favour.
 
marco79 said:
I'm not sure what to call this thread, but need advise on going the contracting route.

I am currently on a fixed term contract with a company. Been here just under 3 years. So I get a fixed salary and claim monthly mileage.

A few years ago I worked with someone who was employed as a contractor. He issued a monthly tax invoice for all his expenses. This actually worked out more favorably for him.

I am looking to find out more about this. I am considering a move to another company as my technical skill is a shortage at the moment.

I assume I have to open a CC, have a tax clearance and get an accountant. The main reason for going this route is so I could one day grow this CC and maybe employ someone with the same technical skills and hire them out to consultants.

I hope I'm making sense, any advise or pitfalls would be appreciated.
Click to expand...

And look very carefully at what SARS determines a contractor or an employee - for tax purposes.
If you work for one employer, have someone you report to or manages you and/or your tasks, and/or are paid weekly/monthly you are considered as an employee and the person you contract to needs to pay your tax for you rather than being a provisional tax payer.
 
SlinkyMike said:
Swiftreg offers a great service and you can register a PTY for around R500.

You should probably find a book keeper and ensure that you keep your nose clean with regard to taxes.
Click to expand...

Used them recently. Great service and sorted in a week.
Now just to do my BEE crap and the like..
 
Pty. Its just a bit more admin apparently. I havent even gone to SARS yet so not sure wtf to do next now that the company is registered.
 
CamiKaze said:
Pty. Its just a bit more admin apparently. I havent even gone to SARS yet so not sure wtf to do next now that the company is registered.
Click to expand...

Maybe register and pop a mail to the guys at swiftreg. They registered the Pty with SARS and they remind you annually about the R100 for returns if you don't make more than R1mil a year.
 
Pho3nix said:
Maybe register and pop a mail to the guys at swiftreg. They registered the Pty with SARS and they remind you annually about the R100 for returns if you don't make more than R1mil a year.
Click to expand...
No im sorted with registration and everything, i will be getting an email reminding me to go to sars and stuff.

I wanted to know what information is required when i evenrually go to SARS.
 
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