Contracting update.

The client's been a bit concerned about taxation/labour law compliance in its dealings with I.T. contractors, so they've been looking at options and organizations to provide a bit of structure around the situation. As a result I've been in to meet one of these umbrella organizations called "Freelancer" which basically provides a contractor service arrangement between contractor and client.

The trouble with contracting in Australia is that the government loves to get its nose into other people's business. They don't want workers using the term contractor as a tax cheat by claiming deductions etc. that legitimate businesses (whether individual or organization) can claim, and at the same time they don't want businesses taking advantage of staff by depriving them of sick leave, paid vacation, and such by labelling their role as a contractor.

Unfortunately it gets in the way of people that are doing the right thing. I'm not looking to, nor need to claim business expenses such as travel, equipment, home office, etc. My only interest is opting out of paid vacation I never get a chance to take, and sick days I never need to use, and applying that extra value against my mortgage.If I can opt to pay my taxes at the end of the year rather than paying too much through the year  to apply for a refund, then I'd rather do that as well.

Frankly I can probably continue doing what I'm doing but I will be getting dirty looks from the tax office the whole time, and probably have to deal with audits. Working through Freelancer will have a few perks, such as having my taxes done professionally and being part of a structure that allows me to legally make various deductions plus split my salary for tax purposes with the Mrs. But this comes at a price, namely 5% off the top of my rate. (Tax deductable) That's like saying to a permanent employee they need to work an extra hour a week for the same pay. So far the client has balked at the idea of absorbing some of that cost in an increase in rate, but the fact is the rate I gave them was the same as if I had worked through an agency and I certainly didn't absorb their margin from my rate. We'll have to see what they say, whether they're going to bother with the Freelancer arrangement and agree to my terms, ditch the idea and continue as-per normal, or ditch the idea of using contractors all-together.