Don't know what the book says, but if you pay yourself a "dividend" from the company coffers to all shareholders, you need only pay 30% tax. Note that the company pays the tax, not the individual, hence the 30%. I don't claim to understand this totally, but I trust my accountant who advises me and allows me to do this at my whim and pleasure e.g. whenever I need new toys, or have big bills to pay!! As I am a 100% shareholder, I pay myself 100% of the dividend. Of course, there may be more tax to pay personally at the end of the year, but I don't think so (in my experience). And yes, I earn over 60k. I am just going through my first provisional tax year, but I was prepared for it and it is not too bad. Again my accountant gave me good advice here. Once again I stress - seek professional advice before going down this path. Hope this helps Dave T
-----Original Message----- From: [email protected] [mailto:[email protected]] On Behalf Of Matt Thomson Sent: Friday, 17 April 2009 9:43 a.m. To: NZ PHP Users Group Subject: [phpug] Re: Full time employee to fixed contractor "Almost every self employed person knows the answer to the above. Look in "Rich Dad, Poor Dad". And get yourself a Chartered Accountant" My accountant is chartered, why assume they are not? To save me reading a book, can you summarise what the supposed method of avoiding 39% is. If it is not illegal, as you said, surely there is no problem giving a paragraph or 2 summary here. On Apr 16, 7:58 pm, Michael <[email protected]> wrote: > On Thu, 16 Apr 2009 19:38:53 Matt Thomson wrote: > > > > > "Not to > > mention that you will pay tax at the buisiness rate (30%) rather than > > the > > personal rate based on income (probably 33-39%). " > > > This what I thought, I went to see an accountant, who told me that > > although the "business" can pay a 30% rate, that money stays in the > > business account. If I get paid a salary from the business, I have to > > pay the usual individual tax brackets, and If I get dividends, then I > > have to pay the difference between what the company has paid, and what > > I should pay as an individual earner. > > > Long story short, she told me if I want to have over 80,000 in my bank > > account (where I can spend it) this year, I am going to have to pay a > > higher tax rate than 30% on a lot of it. > > > Am I/her incorrect here, I would like to have 30% as a ceiling, this > > is why I sought professional advice, to find a way. > > Almost every self employed person knows the answer to the above. Look in "Rich > Dad, Poor Dad". > > And get yourself a Chartered Accountant. Warning: This email contains information which is CONFIDENTIAL and may also be LEGALLY PRIVILEGED. If you are not the intended recipient you must not peruse, use, disseminate, distribute or copy this email or attachments. If you have received this in error, please notify us immediately by return email and delete this email. Thank you. ##################################################################################### This e-mail message has been scanned for Viruses and Content and cleared by MailMarshal ##################################################################################### --~--~---------~--~----~------------~-------~--~----~ NZ PHP Users Group: http://groups.google.com/group/nzphpug To post, send email to [email protected] To unsubscribe, send email to [email protected] -~----------~----~----~----~------~----~------~--~---
