The tax man.

> One of the next steps I need to do is talk
> to an accountant, to see what kind of steps
> I need to take legally to be able to take to
> employ people, or even look at other
> possibilities for outsourcing some of my
> work.

I'm not accountant or lawyer, okay. So anything written here is not to be taken as legal advice.

If at all possible, do not employ anyone as an employee, even if it's part time. You'll have to contribute to their SuperFund. Face all the PAYG tax things. And a whole bunch of feldacarb.

As for outsourcing... good call. But even here you NOW have to watch your step. Outsource to someone with an ABN, so they pay their own taxes, etc., and if you give them too much work the tax man will consider them as your employee - thanks to our new stupid rules. And you'll both be back in the employer/employee boat.

To get around it you'll have to outsource in small amounts - when outsourcing to individuals, sole proprietors, home-based business, etc. - or pay on a commission only basis (the tax man has left the self-employed commission only person alone), or outsource only to established companies with employees.

In other words... when outsourcing: spread it around in small doses to many smaller operators, or have larger operators do it who also have many other clients.

And, if outsourcing to the smaller operators, make sure they also do work for others in a similar fashion to what you provide. If you outsource to someone who has a job, this small business income won't be considered business income and you're back in the employee/employer boat.

Hope this helps.

Michael Ross.

P.S. The above only applies to Australia.