Dealing with transactions

[heids]

Hey all!  As a pretty new tutor, some questions about the uncomfortable money side of tutoring.  Especially question 1 if you can't be bothered answering the rest, please.

1.  Obviously I need to record payments.  What methods/system/book/program do you use?  Is it easier to go the full hog, like signatures, date etc.?  All students in one book, or a separate sheet for each? etc.  I simply have no clue, so far I've just taken money and typed a quick note of it.  Getting messier as I get more students.
2.  I was told I need an ABN and need to organise 9.25% of super.  Sounds a bit over the top to me, right?
3.  It's all taxable income, yes?
4.  Should I refuse to do a lesson if I haven't been paid for the last one?  Any tips for getting over the awkwardness when you have someone who doesn't just pay up easy?
5.  How much is it reasonable to charge for single or group tutoring?
6.  I'm 17, don't need a WWCC yet right? (the students might need one to work with me as a child though )

Thanks in advance

[pi]

How many students do you have and how legal do you want to run your operation? I don't endorse this, but I dont know many tutors who pay tax, its all in cash and all hush-hush. Excel spreadsheets should be a good tool for all of that organisation, columns and rows for dates and students.

You don't need a WWCC for now, worth getting it a month before you turn 18 as they can take that long to process.

As for rates, most people I know start off ~$30/hr (take $10 off for groups), and can move up to $50/hr as they become more senior over the years.

[spectroscopy]

1.  Obviously I need to record payments.  What methods/system/book/program do you use?  Is it easier to go the full hog, like signatures, date etc.?  All students in one book, or a separate sheet for each? etc.  I simply have no clue, so far I've just taken money and typed a quick note of it.  Getting messier as I get more students.
2.  I was told I need an ABN and need to organise 9.25% of super.  Sounds a bit over the top to me, right?
3.  It's all taxable income, yes?
4.  Should I refuse to do a lesson if I haven't been paid for the last one?  Any tips for getting over the awkwardness when you have someone who doesn't just pay up easy?
5.  How much is it reasonable to charge for single or group tutoring?
6.  I'm 17, don't need a WWCC yet right? (the students might need one to work with me as a child though )

i cant really help with the first few questions but
4) if they arent going to pay then its reasonable to stop tutoring them, and it might be awkward  to talk about the money but you just have to suck it up and say "so that will be x" and if they say "ahhh well i cant pay it now *insert excuse*" then you have to use your judgement to decide what to do.
with my methods tutor last year there would be times when i would pay the price of two lessons after one and so i wouldnt have to pay the next time, and sometimes i would have a brainfart in the morning and forget the money and just bring double the amount the next lesson to pay for the previous lesson. but it depends on building a rapport with your students, and becoming mates with them more than just super clinical "ok 1 hour is over bye lol"

5) this is anyones guess really, price usually correlates with credentials, so i see alot of kids who get 48+ in the subject they tutor charge about $30-$40 an hour, low 40s to upper 40s study score students usually around $30 an hour, and if you get less than like 42 then its usually in the vicinity of 20-25 an hour. if you didnt get crazy scores but you are studying the subject at uni/have other academic accolades you could probably charge a bit more.

[Russ]

My records consist of the number of hours worked and the total earned. I don't bother with individual student signatures etc. If you do pay tax, then you can claim/partially claim any related expenses, such as petrol or your computer

You can create an ABN for yourself and make super contributions but this is a poor idea unless you're doing it for tax reasons (in which case you should talk to your accountant).

It's taxable but if you make under the threshold you don't have to pay tax.

I take payment at the end of lessons but if I wasn't paid then there would be no circumstance in which I would schedule another lesson until I had been.

I never advertised or correlated based on my grades, but I charged $30 when I first started uni and it gradually ratcheted up as I became busier/more experienced/targeted more advanced markets. I charge $50 currently to undergrads for interview tutoring fwiw.

[nino quincampoix]

My records consist of the number of hours worked and the total earned. I don't bother with individual student signatures etc. If you do pay tax, then you can claim/partially claim any related expenses, such as petrol or your computer

Please correct me if I am wrong, but claiming petrol is not tax deductible. Since it is not an expense incurred while performing the service (i.e., tutoring), it cannot be claimed. You could only claim petrol if the work involved driving (e.g., taxi). This should also mean that driving from one student's house to another's to render tuition does not constitute a work related expense because you would not be driving and tutoring simultaneously. (But...if you were to drive and tutor, then I suppose that you could claim petrol as an expense, but that would be very odd indeed!  )

Conversely, if you use the computer to teach, then it is a work related expense and as such can be claimed. I believe that you can look at depreciation of the computer as a means of minimising tax obligations?

One last thing, I think a good rule of thumb is that if something is required for you to render your service(s), then that thing is usually tax deductible (exceptions being clothes for the most part, food, etc.).

[Reckoner]

Please correct me if I am wrong, but claiming petrol is not tax deductible. Since it is not an expense incurred while performing the service (i.e., tutoring), it cannot be claimed. You could only claim petrol if the work involved driving (e.g., taxi). This should also mean that driving from one student's house to another's to render tuition does not constitute a work related expense because you would not be driving and tutoring simultaneously. (But...if you were to drive and tutor, then I suppose that you could claim petrol as an expense, but that would be very odd indeed!  )

Conversely, if you use the computer to teach, then it is a work related expense and as such can be claimed. I believe that you can look at depreciation of the computer as a means of minimising tax obligations?

One last thing, I think a good rule of thumb is that if something is required for you to render your service(s), then that thing is usually tax deductible (exceptions being clothes for the most part, food, etc.).

If I interpreted this correctly, you can claim for the travel between your students, just not when that travel is from/to your home. So if you're tutoring in two places, you can't claim from home to student 1, you can claim from student 1 to student 2, and you can't claim for student 2 to home.

I think anyway. I am not an accountant etc.

[S33667]

I'd use this rule of thumb.   If it would be to your advantage to be able to show a regular source of income (ie for a loan application for a car or what not), then I would declare the income.   If not pocket the cash.   Ideally get your payments in cash not deposited into your account as it allows you the ability to decide how much income you actually received for the year (ie you may only declare a portion of your income).   

If you are going to lodge a return keep a receipts for anything that you may be able to claim later (stationery, phone bills, internet etc) as long as you can substantiate how they (or a portion of the expense that you claim) was relevant to running your business you'll be fine.

Is this tax evasion ?   Essentially yes if you earn enough to fall into a taxable bracket but imho who cares, you're taking the initiative to start up your little business when there's whole generations making no effort but sitting on their arse claiming the dole each week. 

[Russ]

You may or may not be able to claim petrol. I'm not an accountant, I was making a generalised comment based on a recent article I read.

[heids]

I'll do my best to do it legally/honestly.  (But I'm not sure - since I use public transport, I have to walk some of the way, can I claim for shoes because walking wears them out? )

Anyway, thanks all, replies have been appreciated

[nino quincampoix]

If I interpreted this correctly, you can claim for the travel between your students, just not when that travel is from/to your home. So if you're tutoring in two places, you can't claim from home to student 1, you can claim from student 1 to student 2, and you can't claim for student 2 to home.

I think anyway. I am not an accountant etc.

I stand corrected: Yes, you can claim petrol as an expense between visiting the premises of multiple students. Apologies.

[tange]

1.  I think an excel sheet is good for recording your students' payments. I don't usually keep a record of my students' payments because I don't charge weekly. Instead, I charge them for every six lessons and give them a receipt upon receiving the upfront payment (while keeping a copy for myself). I prefer this kind of payment method because it saves me from having to deal with your 4th point - awkwardness when someone does not pay. I do often receive late payments but I've never encountered a student who failed to pay the upfront fee. You should stop tutoring that person if they can't pay after 2-3 lessons. 

5. I charged $25 in my first year. Now I charge $35 (tutoring for 5 years). I'm going to increase it to $40 when land a job as a secondary teacher. For group sessions, I usually take $5 off per student. Some tutors charge more based on their VCE results but I think you should take into account other factors (my tutor charged $50 because she received a perfect study score but she really sucked at tutoring)
- Suburb or area
- Relevant experience
- Time involved in planning lessons and writing notes/ essays for students
- Travelling distance