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I live in Australia, and I am currently looking at some of the remote job offerings in countries like US/UK.

However I have very little understanding of what needs to be done to report that kind of income - i.e. do I need to get an ABN, pay payroll tax myself etc.

If you had any experience in this area I would like you to share that.

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closed as off-topic by Robert Harvey, user16764, MichaelT, Jim G., GrandmasterB Sep 27 '13 at 3:38

  • This question does not appear to be about software development within the scope defined in the help center.
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This question appears to be off-topic because it is about tax advice. – Robert Harvey Sep 27 '13 at 0:18
up vote 4 down vote accepted

Tax law varies from country to country and depends on (sometimes changing) treaties between countries.

Generally, where you file your tax return depends on your (primary) country of residency. For income earned in the other countries, you may need simply declare it as foreign income, or file a tax return in that country and claim the taxes paid as a deduction on your return for your primary country.

IIRC, when I did it, I filed a return in both countries, but in the US only I declared the AU income also and claimed the AU taxes as a deduction, however for the AU I simply didn't declare my US income in AU. That may have been because I was moving permanently from AU to the US.

(Caveat: My experience is from 1994 when I moved from Sydney to the US)

Note: It is quite likely that rules between AU and the UK (and other British territories) are much more lenient than between AU and US, and certainly than between AU and, say, Saudi Arabia.

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I live is Australia but contract for a company in America. I have my own company (with an ABN) through which I charge my services. Every month, I send them an invoice and they pay it - it is as simple as that. If you run through a company, you are essentially just exporting services so income tax should not come into it (you just need to pay yourself income from your Australian company, so no international issues there). Since you are an exporter, you do not charge GST on top of your invoice.

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So your company 'pays' you the salary? do you have to pay the payroll tax as well? Thanks. – Art Jan 13 '11 at 22:49
My company has to pay salary, work cover, superannuation for each employee. You need to file a company tax return each year for which you'll need an accountant (perhaps ~ $1000per year). An accountant can help you with this stuff. If most of your income derives from a single client, you'll be hit by the 80/20 rule and will need to pay out all of your companies income (minus expenses) as salary. This can be annoying if you wish to leave some money in the company for rainy days. Being a company, you can claim a fair bit back plus the GST. – dave Jan 14 '11 at 2:08
Can you comment on this:"need to pay out all of your companies income (minus expenses) as salary." is this rule jsut for US? – Kaushik Sep 26 '13 at 20:56
@Kaushik - No, this is Australian tax law. I have no idea about US laws. It is the government's way of working out if you are a real company or just a contractor acting as an employee. If almost all of your income derives from a single client, then you can be determined to be effectively an employee of that client so anything you earn needs to be paid out as salary. If you have multiple clients or multiple employees you can avoid this situation. Again, this is Australian law only. – dave Sep 27 '13 at 0:18
thanks...looks like the multiple clients portion is a loophole. You can do a side project for another client once a year and bingo, you dont need to pay all corporate income as salary. a.k.a tax savings:) – Kaushik Sep 27 '13 at 3:57

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