topic Re: How to factor in taxation ebay. in Selling

How to factor in taxation ebay.

erg-auto-electrical-wholesalers — Sun, 27 Mar 2016 08:39:53 GMT

Is it 10% of the total price I must pay tax?

Does the ebay calculator include the paypal feed?

Do i calculate the paypal fees by deduction the ebay fee from the original sale price and then using the calculator?

Thanks.

So in reality it is 26% I must cover.

10% tax

12% ebay

4% paypal.

Is that right.

Re: How to factor in taxation ebay.

stampdog42 — Sun, 27 Mar 2016 09:52:54 GMT

Are you GST registered?

If so, then 1/11th of the total price (item + postage) goes to the ATO as gst for domestic sales (0 for overseas sales).

Paypal and ebay fees are based on the total (item price + postage) payed by the buyer.

Neither paypal or ebay pay gst so you can't claim gst back on their fees...

If you don't have a store then ebay fees should be 10%, paypal 2.6%, gst 9.09%.

But these are all %s of your total (price + postage) sale prices...

Tax to the ATO will depend on your profits (ie sales - expenses) .....

Re: How to factor in taxation ebay.

davewil1964 — Sun, 27 Mar 2016 09:56:29 GMT

10%?

You pay tax on every cent once you get past $18k pa. Total taqxable income. Not just eBay sales.

eBay fees are 10% or less; Paypal fees are 30c + 2.6%.

The tax you pay is on your taxable income. Nothing to do with eBay or Paypal.

Are you sure you're ready to operate a business? You don't seem to have any idea.

Re: How to factor in taxation ebay.

lyndal1838 — Sun, 27 Mar 2016 10:34:23 GMT

You originally told us you were running this ebay business on behalf of your uncle.....it is his business.

If this is true then any GST payment should be made by him....not you.

Or was that a pack of lies too?

Re: How to factor in taxation ebay.

soundtraxcds — Sun, 27 Mar 2016 10:46:34 GMT

I think you are confusing GST and taxable income.

You do not need to collect GST until your turnover approaches $75,000 per financial year, which will be hard to do until your store ramps up and you can list more.

However, you have will have to pay income tax on your profits as you are running a store and it is definitely a business. If you were selling 2nd hand items from around the house then you wouldn't need to declare your income, but you are selling new items with the sole intention to make a profit, so you will need to pay tax.

Buy a starter motor for $50, sell it for $115. After removing postage fees, eBay fees, PayPal fees, you might be making $42. This will be the amount you pay tax on, at your marginal rate, maybe 30 cents in the dollar or more, depending if you have other employment.

Of course there will be other part deductions you can use to help reduce paying tax on your $42 profit, such as part of your internet bill, part electricity and rent/mortgage payments if you set up an area of your house to conduct your business. But these costs have to be realistic and worked out with a detailed and professional approach.

The thing to remember is to keep records of everything you buy and sell, as well as your expenses. You will need to be able to prove everything if you have an audit, which is unlikely if your sales are small, but may probably happened as you become a power seller!

Re: How to factor in taxation ebay.

digital*ghost — Sun, 27 Mar 2016 10:57:34 GMT

These kinds of questions would be better answered by an accountant who can first get a little insight into your business, and provide some tailored advice. (Perhaps the questions themselves aren't, but if they're necessary to ask, then I think you need an accountant's help).

I think this kind of help is a little too comprehensive for a general discussion forum - I'm not saying there isn't anyone here who could walk you through all the basics of business operation, a lot of people could, but in my humble opinion, the vast majority wouldn't, because that's getting into highly time-consuming billable-service territory, to be perfectly honest.

As a very rough guide, you pay tax on your income after all expenses. You don't just sell 10 items for $100 and then work out 10% of the total to calculate tax, unless you incurred $0 expenses in the operation of the business.

Income tax isn't 10% though, and GST is something different entirely, not to mention a more exhaustive (if not comprehensive) process, so if you have to be including and paying that, consulting an accountant becomes imperative.

Re: How to factor in taxation ebay.

davewil1964 — Sun, 27 Mar 2016 11:22:02 GMT

Maybe the uncle/account owner has NFI either?

Or thinks they can get accountancy/tax services for free here?

Blood will out.

Re: How to factor in taxation ebay.

harley_babes_hoard — Sun, 27 Mar 2016 11:56:14 GMT

ahh just sit back and watch them hang themselves......

Re: How to factor in taxation ebay.

collect247 — Sun, 27 Mar 2016 12:40:15 GMT

GST threshold = $75000pa

OP has so far sold around $400

What GST is he talking about?

Re: How to factor in taxation ebay.

collect247 — Sun, 27 Mar 2016 12:52:49 GMT

ERG I don't get you because I have read some of your posts on other members threads and you seem to have

given good advice and it showed to me that you seem to be an intelligent person.

But then you go and start threads and the questions you ask are quite stupid.

IMO I think that you're playing games with members on these boards.

Re: How to factor in taxation ebay.

erg-auto-electrical-wholesalers — Sun, 27 Mar 2016 22:43:37 GMT

I do not run it.

He runs it.

I just help him upload the items he wants to sell on the on-line store, and how he wants me to reply to the messages and navigate Ebay till he can do it himself. You ever taught an old person how to use internet explorer? Then you feel me.

I have nothing to do with the runings of his business.

When I ask, I ask on behalf of him.

He is not very computer literate.

So please seperate the two.

But yes he is ABN registered

Re: How to factor in taxation ebay.

clarry100 — Mon, 28 Mar 2016 01:09:53 GMT

Having an ABN does not automatically imply that you are registered for GST or need to be. These are two different things.

My wife and I operate two ebay stores and each of us has our own ABN.

But we are not registered for GST since neither of us comes even close to the $75K threshold in total annual sales volume yet.

But we are subject to normal income tax and that is why we employ the services of a registered tax consultant/agent.

I would strongly suggest you do the same if you are not very familiar with tax requirements. The ATO will not listen to "I did not know" if they haul you up for a desk audit. You have to know, or at least have a tax agent on board who does know, thats what they get paid for.

Re: How to factor in taxation ebay.

soundtraxcds — Mon, 28 Mar 2016 01:38:24 GMT

So if your uncle has a shop front and you are helping him to grow the business with an eBay presence, nothing much will change from his normal avenue of sales.

No doubt he'll already be collecting GST from his shop, and you will need to do so on eBay.

He will already have expenses from running the shop. PayPal and eBay fees will be an extension of those expenses.

Taxable income will probably be in the form of company tax (assuming his shop is setup as a company) which is currently 28.5%.

Your uncle may not be good with the internet, but if he's been running a shop for a period of time no doubt he would be fully aware of how sales, profit, expenses, and tax work.

Re: How to factor in taxation ebay.

247newdeals — Mon, 28 Mar 2016 04:28:14 GMT

@erg-auto-electrical-wholesalers wrote:
I do not run it.
He runs it.

I just help him upload the items he wants to sell on the on-line store, and how he wants me to reply to the messages and navigate Ebay till he can do it himself. You ever taught an old person how to use internet explorer? Then you feel me.

I have nothing to do with the runings of his business.
When I ask, I ask on behalf of him.
He is not very computer literate.
So please seperate the two.

But yes he is ABN registered

You say your uncle is already running a business surely he pays tax and GST if required why don't you ask him because how he pays the tax on the Ebay income will be 100% the same as the tax he pays on his current business.

As far as teaching an old person how to use Internet explorer well I am no spring chicken and a LOT of older people are more than comfortable doing the basic on a computer which is all that is needed to run a Ebay store, I use to run a company teaching circus skills and one thing I learnt was there is no such thing as a person that is hard to teach just teachers who lack the requirements to pass on the knowledge

Re: How to factor in taxation ebay.

lyndal1838 — Mon, 28 Mar 2016 04:33:22 GMT

@erg-auto-electrical-wholesalers wrote:

You ever taught an old person how to use internet explorer? Then you feel me.

I have nothing to do with the runings of his business.

But yes he is ABN registered

I AM and old person and I taught myself to use IE....and Firefox and Chrome as well as a few other browers and programs on the computer.

If he has an ABN he would also be submitting a BAS so I presume he has an accountant to look after his tax affairs. The accountant would be aware of when GST kicks in.

It might be a good idea to let your uncle know that the prices on ebay are GST inclusive....he cannot add any more to the invoce after the sale.

Re: How to factor in taxation ebay.

phorum_junkie* — Mon, 28 Mar 2016 05:21:03 GMT

Me too Lyndal, an oldie and mostly self taught, I did do an IT course many years ago, think it was about the time of Windows 3.1, as I was not up on a lot of things and was volunteering at a place where we taught computer skills to those with impaired vision . The internet is a completely different ball game now but I believe I have pretty well kept up, old as I am 🙂

Rather than teaching your Uncle a problem loaded, glitchy, non ebay friendly browser like IE why not show him on Chrome, Firefox, Opera, Safari or any one of a dozen other browsers that are more ebay friendly.

Re: How to factor in taxation ebay.

erg-auto-electrical-wholesalers — Mon, 28 Mar 2016 07:10:31 GMT

I already tried the chrome switch.

He like IE.

It is what it is.

I don't need anyones help in that area but thanks for the gesture.