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rachelun
Member

Paying tax in Australia on income from Upwork

Hi,

 

I am an Australian resident for tax purposes and am looking into how to pay tax on my income from Upwork. My questions are:

 

Is my Upwork income considered 'foreign income'? Is it considered foreign only if the client is from a country other than Australia? Or is all Upwork income considered foreign income (even from clients within Australia)?

 

Thanks in advance!

Rachel.

12 REPLIES 12
jatinder1247
Member

Dear Rachel,

 

If you are working for yourself in Australia then you need to do two things. Firstly you need to apply for a TFN(tax file number) at the ATO (Australian Tax Office). You can check online at ato.gov.au as to what documents you need. I did it at the office, but a lot of things can be done online here in Australia so check to see if that's possible.

 

Then when your TFN is issued, you will need to apply for an ABN (Australian Business Number). You can check abr.gov.au as to what you need for that. With the ABN I'm sure you can apply online.

 

Armed with your ABN, you can now work for yourself and issue invoices in your name as a sole trader.

 

Now if your income is above a certain threshold (I think it's $75,000) at the moment, then you need to register for GST (Goods and Sales Tax). It's 10% here in Australia.

 

That means that every three months, you check all the bills your business has paid and you claim back 10% GST. But also, you check every invoice that you have issued as a business and you will have to pay 10% of it to the tax office.

 

now coming to income tax you have provided services in AU so your income will be taxed here as australian income.

 

Hope that makes sense. If you have any other questions, feel free to ask.

Thanks very much for your reply Jatinder, much appreciated.

 

So, to confirm, if I am in Australia while I provide the services (regardless of where the client is, or the fact that Upwork.com is an overseas-based website), then my income is still considered Australian income. Is that correct?

 

I do have another tax question also. Since my payments from clients can be kept in my Upwork account until I choose to have the money transferred to my bank account, I am wondering when (from a tax persepctive) the payment to me is considered to have occurred - on the date the client submits the payment to Upwork, or on the date that the money is transferred from my Upwork account into my bank account?

 

Thanks for your help!

> So, to confirm, if I am in Australia while I provide the services (regardless of where the client is, or the fact that Upwork.com is an overseas-based website), then my income is still considered Australian income. Is that correct?

 

I just spoke to the ATO last week and that's correct. It doesn't matter where your income comes from.

 

> I do have another tax question also. Since my payments from clients can be kept in my Upwork account until I choose to have the money transferred to my bank account, I am wondering when (from a tax persepctive) the payment to me is considered to have occurred - on the date the client submits the payment to Upwork, or on the date that the money is transferred from my Upwork account into my bank account?

 

I'm guessing here but the date the money gets to your account makes perfect sense.

Thanks for your reply Ivan and sharing your recent information from the ATO.

When you said that you thought the date it is transferred to your account makes sense - did you mean the Upwork account or the bank account?

Thanks!

I meant bank account. ๐Ÿ™‚

Hey too everyone on this thread!

 

I'm very confused with upwork, now it's tax time. So wondered if you may be able to answer?

 

Because we get paid in US dollars, but it's in AUD when it hits the bank account - which amount do i report?  I haven't recorded anything in say MYOB or Xero etc coz i'm so confused!

Also, am I to report the total amount and then take the fees out? 
For example : Emma Taylor - 1:10 hrs @ $20.00/hr - 03/12/2018 - 03/18/2018 so i received $23.33 (US $ obviously and i've looked it up on that date for conversion and it was 33.15 AUD) then there was a service fee of $4.67 and GST of $0.47. making it $18.19 US ($25.86 AUD)

 

DOes that make sense? Or have I just over complicated it? I also need to get it sorted for centrelink

Obviously i need to get this all sorted so I can do my tax return. 

I would great appreciate any help!

Hi Emma,

 

I would suggest to consult yourself with a local specialist on how to report your earnings from Upwork and your taxes. Thank you.

~ Goran
Upwork

 Hi Emma!

 

I know this is an old post, but I was wondering if you had sorted out the question of : "Because we get paid in US dollars, but it's in AUD when it hits the bank account - which amount do i report?" as I am now wondering the same thing. 

 

Thanks so much in advance ๐Ÿ™‚

 Hi Emma!

 

I know this is an old post, but I was wondering if you had sorted out the question of : "Because we get paid in US dollars, but it's in AUD when it hits the bank account - which amount do i report?" as I am now wondering the same thing. 

 

Thanks so much in advance ๐Ÿ™‚

Hi, I contacted the ATO some time back and they advised that I needed to convert each payment from US to AUS using the conversion rate from when it was transferred to my Upwork account (that is when it becomes โ€˜mineโ€™ - not the date it is transferred to your bank account). Conversion rates are available on the ATO website. Is that helpful?

Hey Rafaelle,

Sorry! i never got a notification! 

I still have no idea how it is done. currently still waiding through it for 2019-2020 return. 

I had an accountant do the last, but cost me a fortune, and at the moment can't afford that. So i have been trying to match her figures by doing the 2018-2019 as a trial run, just on my pc and i still can't get my figures to match hers! 

roseldugeno
Member

Hi Rachel,

I'm just wondering if you can help me answer the tax question...

I'm relatively new in Upwork and I recently got a client. I have a daily tasks for the client and my income is somehow consistent since I started 3 weeks ago. I'm just wondering if I need to lodge a tax report in ATO for this year? Thanks in advance!

Regards,
Rosel
Learning Paths