Salon Rising: The Podcast

Transcript

You're spending all of your fucking profit. Stop shopping at Adairs, stop buying all the things. And this is like the biggest thing I think we should take out of today. Find your person, find someone that's going to be there for you or not be there for you. There's two things you can never fight and that's death and taxes.

Like it's coming for you no matter what. And it wasn't until I started working at a store.  Hello. You know, I meet mum and dad and everything I do, I see in their life and I'm making their life better. We fear it because we don't get it. Yep. We don't do it because we don't get it. We bury our heads in the sand because it feels hard.

As soon as you know these numbers, The empowerment behind it is massive. See, that's the thing I think that's so important. Like we talk about it all the time in terms of like tax money. It's not your money, but you're right. That's not, you're not only not your money, it's somebody else's  money. So if you think you're killing it because you're paying yourself 1200 instead of a thousand, but you're not putting all of these other things aside, you're not. 

You're ripping yourself off. Just, you've got to, you've got to vibe, I think, with your accountant. I love that my business supports their business. Um, but I just have this like fierce group of women. And if you're paying tax, you're making money. What a catchphrase. Let's make tax fun.  Everyone's like, okay. 

Hey lovers, just a quick one. If you listen to us and you love us, could you please hit that subscribe button? I know it's a pain, but that little button means the world to us and our podcast and means that we can get more great guests on like we know you guys love listening to, so  do a girl a favor, hit subscribe, and we would be so grateful. 

We just wanted to say a massive thank you to our podcast sponsor, Kevin Murphy, distributed by Ozdare and thank them for being the most amazing brand partner for Salon Rising. This brand is truly incredible and we are so excited to work alongside you.  Welcome back everybody to the Inner Sanctum Salon Rising, the podcast.

It took us a good 25 minutes to get into this podcast this morning because we've just laughed so much. Like my cheeks actually hurt just sitting here trying to be normal.  Um, we are in a different location today. We're just like, Change it up in a boardroom setting,  um, which is getting official, which is very fitting.

Yes. Is it though? Well, we don't have to be based on the last 25 minutes.  I thought it was fitting, but now I can see that not much work gets done. No, we just have fun. Yes. We have fun that benefits us. It's everybody around us. Agreed. Yes. Bringing the light. So we have a special guest today. Someone who's very important to everybody in this room.

Very important. Would you like to introduce our special guest Sam? Yes. Guys, this is my very important, very gorgeous accountant. This is Paris from Group 1 Accounting. And we have worked together now for about,  not long enough, three years, two and a half years, three years around that time. Um, and.  You've changed my life 100%, which you always get really funny about.

You're like, with the help of other people. Yes. Um, so  when I came on with Paris, I was working with another accountant who I loved. Um, it was actually one of a good friend of mine's husband's and it was a bit sticky because I knew I needed a change and I loved him and he was great and really helped me with the first part of my business.

But I just felt like I was. paying too much tax and I just needed different eyes on the business. And I remember coming to you and you were like, yep, cool. Like, I think we can look at this structure and this structure. And we, yeah, that was, you know, two and a half, three years ago. And it, my business has dramatically changed with how I pay tax, what I pay.

And I just feel like, Finally, I'm on top of it. The scariest thing was for me was the first 12 months because Paris was like, I, we pulled the rug. I thought it was just going to go like overnight. Everything would go back to, to feeling awesome. And it wouldn't be stretching your heart. And all of a sudden I'd be paying last tax and you were like, Oh no, this is when it's worse because you have to like get through it as well.

Yeah. Yeah. Yep. Um, and there was lots of different things that we needed to do in the beginning, um, with. Um, you know, I remember ringing you and being like, Oh, they're making me pay back my maternity leave because it looked like on paper that I'd earned too much,  but it hadn't been the case. It just had been the way that things were set up and you were like, nah, I'm on it.

You'll have to go back over 12 months and readjust it. So again, I don't know all of the stuff that goes on in the background, in the background that you do, but after 12 very salty, scary months.  Everything became so much easier. Which I appreciate you trusting in us. Yes, because you didn't have to. I remember reading you and being like, this doesn't feel easier yet.

You were like, just like knuckle down. Yes, and yeah, it's a lot.  And I think it's important to say when we did start working together, I was working with a team. So it wasn't just me that brought all the greatness to you. So even though I work for myself now. But yeah, you're just like a beautiful flower now.

You've flourished. You've flourished. You've done everything right. And every time she rings, she's like, you're doing it right. And I was like, Oh, thank you. Like I need to know. And I think that sounds silly in itself, but for me having an accountant that was like, Good job. Yeah. The way you're doing this is right.

Yes, that's correct. And I say this to people all the time, like one of our questions on our questionnaire, when someone works with us one on one is, do you have a good relationship with your accountant? Not, do you have an accountant? It's, do you have a good relationship with your accountant? Because you need to be able to ring them at any point and be like, okay, this feels stretchy, where am I at?

And I think the same thing with it, like with accountants that people don't realize is.  There's Paris now knows there's certain things that I need in order to feel safe and comfortable financially within my business. She knows like, Oh, she'll be like, you know, this needs to be paid. And I'll be like, but I don't want to take that out of my account.

And you're like, Oh, okay. So you like, you like money in the bank. You need cash. Yeah. Yeah. You're like, for you to feel safe is money in the bank. She's like, I want you running at a loss, but to feel safe, you need money in the bank. Yeah. Amazing. Yeah.  And the other thing was, When in the early days, you'd be like, here's your bass and you'd send it.

And then I'd be, I'd open it and be like, I'm overwhelmed. I don't know what any of this means. And now I'm scared. And is it too much? So then you and I had a conversation and I was like, I need you to call me. Yes. Talk me through it. I knew. Tell me I'm going to be okay. And then I will pay it. Yes. I need that communication, which.

You've got many clients and a lot of them wouldn't need. No, that's right. Everyone needs something different. That's right. I knew the minute I pressed send on an email, the phone would ring and it became funny in the office because I was like, where's the phone? Yep. There. Send. Hey.  But that's great because I would hate you for you to sit there for days going, I don't get it.

I'm too scared to ask. I don't want to bother anyone. Yeah. And I think that's what I used to be like. I, and I say this to people, I never knew, understood. I didn't understand. Tax until you and I met and remember, I just kept going, but like, what does this mean? But what does that do? What does, what tax am I paying when I pay this?

Because you just, we constantly get these bills and none of us really know.  At that point what they meant, why we were paying them. What bit of tax it meant. How come there was a big tax at the end of the year? How come tax didn't get done at this time? And it wasn't until I started just questioning all of the time and I felt really safe and comfortable with you to do that, that I was like, Oh, I finally, it all clicks.

I finally understand. It does, it takes time. Like even when you're studying it. So even my early uni days, it takes time to understand. So,  Are, are all accountants is forthcoming to explain things? I don't believe so, but it's, and I wouldn't suit everyone. So that's what I mean. That then this is like the biggest thing I think we should take out of today.

Find your person, find someone that's going to be there for you or not be there for you. Or, you know, because sometimes. Maybe having an accountant like myself that wants to be more hands on and is available more. It's going to cost you more. Yeah. So you don't, you know, you don't to be paying for that service if that's something you don't want.

Yeah, so, but yeah, feeling safe. I think you should never be too scared to pick up the phone and yeah. It doesn't matter what it is, and I ask the same questions over and over and over. Yep. It's, I still don't get it. Is there another way you can present it to me? So yeah, for me. like.  I, it's huge when I actually like, I don't want to get it.

I'm like never get emotional on the podcast. I feel emotional today. Um, going through my divorce, my separation financials, like I've got an incredible family lawyer who actually is Jen's cousin and I, she's been incredible and like her and Paris work so beautifully together and like even that and the constant communication of like.

the three of us, like, you know, anytime Paris gets back to Jen, Jen's like, you guys are amazing. Thank you so much. Or, you know, and it's really nice. I watch them communicate. And then, you know, I remember one day I was feeling really overwhelmed and I was like, I'm just so grateful that I have these women in my corner that are just like, Paris is like, whatever you need, I will sort, like, just tell me what you need.

I'll send it all through because I don't know all of the things and Paris knows all the things when it comes to my business. And I know most of them,  You know, I'm like, can you explain this? I don't understand what this is.  And, you know, just having that and then being able to actually feel safe in this situation that I'm in that, cause I know I've done everything 1 million percent by the book, right?

But when you have another party that  doesn't think that, it's really hard to be like, am I doing things right? So I would like ring Paris and be like, I'm doing things right. And she's like, buy the book. You are incredible at how you run your business. Like it's exactly what you need it. Like, yes, yes, yes, yes, yes.

Like there's nothing you need to worry about, but having someone that can reassure that. Yeah. And then having a team behind you that can like support that the legal, you know, Jen knows anything she needs, she can go to Paris and vice versa. Not me, Jen. Not my solicitor, Jen. Jen. Jen. Um, Jen's cousin, Jen,  sorry, Jen's cousin, Jen, super confusing.

The other thing about it too, that it's been quite, um,  special for me being on the outside of it is both of my accountant and my lawyer have stepped out now on their own. Yeah. And.  again, being able to, you know, for me, I love a supporting that. I love that my business supports their business. Um, but I just have this like fierce group of women.

And I've, I've said that I say that all the time. So when I ring Paris, Paris is always like, okay, first and foremost, how are you? And sometimes I just unload it. I'm like, Oh shit, this week it's too much. I don't, you know, and, but as you said, not everybody needs that. But for me. I need, I need to know that someone is in my business with me.

I don't want an external party that's like, that's your business. We're done. Yeah. Here you go. Don't talk to me. Like I needed someone that I feel like is in my business. It's the same with my reps. Like I want to feel like you're in this with me helping me build this and, and telling me like, if your accountant's not going to be the person that's telling you that they're proud of you financially, who is?

Yeah. Yep. Yeah. And the human aspect is what I love. Yeah. And that's why. I've worked in big firms and started in Brisbane and ended up, you know, just never fit in. So I was always told to dull who I am, you know, too bubbly to, you know, not be so friendly. So, and then eventually you get to the point where you're not really seeing clients at all.

Yeah. Did you?  So. Cause you, you clearly, this is who you've always been as a person, right? Yeah. So. Bye. Mm. Um, did you find it,  were there people that said, why are you going to become an accountant? Yes. And still do every, every day, you know, so, and I mean, thank goodness that you did because it's different. 

Exactly. And I can't do a lot of the things that maybe those high level hounds do. I'm not interested. I don't want to. So if I started in audit, which was terrible because I'm way too kind. So it got to the point where I was like, not really caring that that duck is not there or, you know, so I was like, this is not for me.

I'm too nice. Really get along with everyone so well that they probably want to be friends and that's not good when you're an auditor. So yeah. So then I was like tax.  I'm going to, yeah. So this was all when I was a junior a long time ago, but yeah. And then found tax and still didn't really like tax because I wasn't seeing people.

And, and it wasn't until I started working at a smaller firm that I was like, Oh, hello, you know, meet mom and dad and everything I do, I see in their life and I'm making their life better. And yeah, I think the first time I met you didn't have a breast pump. Yeah. Oh, the moment you walked in with a breast pump on and I fell in love with you.

So I was like, you're my person  and I want to be with you  and the other ladies in the office. Didn't have children. Yeah. So, yeah, so, so I don't think there was a, it was a different feeling for them. They were like, yeah, yeah. I was like, oh, come. I was like, this is me. Let's go. Yeah.  . And that's what I, yeah. I really enjoy working with women.

Yeah. Who, similar age. We've got children, life's messy divorce like, yeah. So it's just so fulfilling. It's like ideal clients, right? Because again, you wanna watch.  The whole point for you is to watch women thrive through this, you know, and even, you know, we've had conversations of like, all right, how do we do this?

Moving forward? My, um, like LaSorella had my ex husband attached to it at a point, not in a big point, but you know, this is a scary thing too, that I will say to people is, and I'm quite open to say it now is, um, I built that business from the bottom up. Yeah. 16 years of LaSorella that I have built and worked in and, you know, busted my ass for and supported my family with.

And then you get to this point and  by law there's entitlements to that business. Yeah. And I just think, like, I understand it in situations where  The mum is a stay at home mum and she raises the babies and the husband has a business. A hundred percent, like, but that was not the case in our house. And I had a nanny.

And I have to bite my tongue so much not to  Explode, Jen, like I, it's almost like I've, I'm so used to it now that I can soften over years. But  if anyone ever sees Jen in public and mentions my situation, watch her blow! You're going to come out on top. As my best friend. So,  I guess. in that situation. It's, it's scary because you've built this business and it's only ever been me.

It's just never been another person's business. No one has ever done my books. No one else's. It's just because you are married and you can, when it comes to tax, if someone's not working as much, you can have trust that set people up through it. And I think that's so scary, but that also can be done in a non scary way.

So, and they're the conversations you and I have had as well is if you are in a relationship and you can. Get the tax benefits out of both of you being within businesses, but then that's when things like your lawyers come into place because you've got to, like, the thing for me now knowing is I've got to protect myself first and foremost, and my children first and foremost, no matter what, because I never thought my life was going to go this way in the beginning.

So I'm never going to put myself in a situation, no matter how much, you I know this is right or I'm in love or whatever it is, I will never put myself in that situation again because I thought I could trust this person and I cannot. Yeah. Yeah. So such valuable information to share. Yeah. It's been an interest, like it's an interesting  kind of concept.

So your accountant, structure with your accountant, your lawyer and then estate planning. Yeah. Have all of that. It doesn't matter if you're 20. Yeah. Get it done. Yeah. Yep. Yeah. So I'm in that case at the moment. Yeah. My, my wheels and all of the stuff for the kids and stuff like that, I've just done it, you know, and it feels so weird when you do it, you know, like, cause when back in the day when I was married and everything was okay, you're just like, Oh, well, if something happened to me, it's fine.

Like all my money would just go there and that'd be fine. Whereas, um, Um, I have never felt my life more value than I do right now that I'm the sole carer of my three kids  and all the finances also rest in my hands. So,  you know, making sure that that's wrapped up so that that's safe, if anything ever happened to me and the children would be sorted.

Like it's stuff like this that we don't think of in our twenties, but it's really important. Yeah. Yeah. And for young women, any young women that's listening to this, you  I think that  I wish I, I don't think I would have heard it  in saying this. I don't think I would have heard protect your business and protect what you're building for you. 

But  I don't know if there's any.  inkling and anyone takes one thing out of this I would say do it like protect if you're building a business and then you meet someone protect that business that's yours you know I just really I wonder if you had had someone like you though say that if you would have taken that on board you know what I mean interesting I don't think I ever thought I was going to be here So probably not.

So that's what I can say to people, even if you never think you're going to be in this and that's why I say even now, I don't think I'll be in this situation again, but I will never put myself in it again. No. So that, you know, I will always protect myself and have all areas sorted.  And your partner should be receptive.

I know that's a hard one because they're not always are. But if you need to have those hard conversations to me and they're not, not receptive, then that's an issue. Yeah. Yeah, because they should want you to be protected and your children. So the conversations that we've been having recently. Yes. About the different ways that we set things up. 

Watch this space. Yes. Um. Um, is that why you offer all those options of like, okay, well, let, let's look at the different ways you can do this. Like you can do it this way and here are the pros and here are the cons. This is like setting up a business. Yeah. Yeah. So we're looking at company trust. Yeah. That sort of scenario.

Yeah. And that's the kind of thing that you need to be taking into consideration when doing those things as well. Right. Sort of, uh, not so much for family law, more so for if you are to get sued, In your business, you don't want your home to be unprotected. That's the thing, but it can feed into that. Yeah.

So, so the scenarios that we were talking about. Um, I'm not sure how they would hold up in a family court after what I've seen you go through, but, but, you know, But the same with, like, I think people need to understand those things when they're starting a business for themselves. Is that, you know, understanding that, especially in the world that we live in today, I mean, on the other side of things, Uh, my sister in law is a personal injury lawyer, so she's the person who's coming to take your house.

Do you know what I mean? So you do have to think in terms of that protection when you're setting your own business up and how you structure your business  because there's, yeah. Which will hopefully never happen, but it does.  Mm. Yeah. So, yeah, absolutely. So, and I think that's 'cause it's really easy for people to be like, no one's gonna sue me for that.

Yeah, yeah. And they people do. Yep. They really do. Yeah. And it does, it costs money to put it in place in the first place. So when you, when you're setting your business up, you, you don't have cash flow. So, so looking at the few thousand dollars that it's gonna cost to set it up, but you kind of gotta look past it.

Yeah. Yeah. Think of the worst possible case scenario, and especially if you are. Husband and wife and like what we've seen you go through where the wife maybe has the business then, you know, and the husband doesn't have anything to do with it and you might end up losing her. Yeah. Yeah. So, but I think probably in conjunction, accountant and lawyer.

Yeah, definitely. Yeah. All in a row. And, um, All right. Let's simplify this stuff right down. Right.  Because we got, I went on a tangent because as I do, but let's simple things, simplify things right down because I think when it comes to tax,  um, a lot of us don't understand it, but, and this is how I explain it to people.

So there's a few different types of the way that we pay tax.  So the first one is  when it says income tax, what is that? Yes. So income tax, every. Working citizen in Australia will pay income tax based on whether they receive a wage or if they have their business, whatever profit is left in their business, they'll pay income tax on it.

So that's so straight out on a marginal scale starts out at 16 percent goes all the way up to 45%. So when the best way I can explain this to people when it comes to income tax is  before you're a business owner, you worked for somebody, you received a wage.  Pre that wage, but no one sees it is your taxable wage.

So your boss comes through, pays your tax on your wage and you get your wage. That's it. Yeah. So you don't really see the amount that's going to the tax man. No. So I think it's kind of out of sight out of mind until you get a refund once a year. It's easy to be, it's just, you don't even think about it.

Whereas I think what happens is people get a business and then they think.  they don't understand that they've got to pay tax on every dollar that they make. Yeah. Yeah. So, and it's different for different structures. It's different for different structures. 100%. Yeah. And there's obviously a few different structures.

So when you say that you could be a sole trader or a company. Yes. Yep. And they pay tax very differently. Yeah. So yeah. So sole trader, everything that comes into the bank is yours. Yep. Whatever you pay out. Um, gets you a net profit income, less your expenses, net profit, then that's what you pay tax on. Yeah. 

Money. That's like, Oh, it's not even money. That's in the bank. It's just a figure. Yeah. And I think that's the thing too, is everybody goes and that we hear this so much and I used to do the same thing is like, you'd come to the end of the year and your accountant would be like, congratulations, you made a hundred thousand dollars.

And you'd be like, Where is that? There's none. There's no 100, 000. Where is the 100, 000? Yeah. So you'd be thinking that needs to be in the bank, but what it is, guys, is you taking 500 here, 500 there, 200 here, 600 there. Like it's you taking money from your business, transferring it into either your personal account or just spending out of your business on personal expenses that aren't claimable on your business.

All of that money over time,  just. Over that year just continues to increase so that when the, your accountant does at the end of the year, they're like, okay, so this is the amount of money that you took over the year. It was a hundred, say a hundred thousand dollars. So that's what you've got to pay tax on.

And that's when everyone's like, Oh, I don't have that money. I've spent it. And that's why we get so.  Strict with how you should put money away because of the fact that no matter what they say, there's no, you can, there's two things you can, you can never fight. And, and that's death and taxes. Yeah. Like it's coming for you no matter what.

Yeah. So if you are bearing your head in the sand, whether it comes for you in six months or five years time, that bill has to be paid. Yeah.  And if you're paying tax, you're making money. Yeah. And in Victoria Devine's words, it's a privilege to pay tax, which I always think. So I know it's hard to swallow sometimes, but put the proper process in it in place.

Like you do not stressful. Yeah. You've got your money put there. So, yeah. And then if your account's amazing, hopefully they can reduce your tax and you've got. A refund leftover, just like if you were an employee. Yeah. Okay. So that's income tax. So you pay that's if you were a sole trader, come the end of the year, that's when you would pay your income tax.

Now, the other thing with income tax is that's also your employees taxes. Isn't it? Income tax as in PAYG. Oh, it's P A Y G. So separate tax. Separate. Okay. So that's income tax. Yeah. Your income, you get taxed on what you make. Yeah. And if you've spent it. Okay. You're still going to have to pay tax on it. So that's income tax.

So that comes once a year, once a year. Yep. Yep. Which could, and you know, usually if you're going to have a tax owing, prepare your tax return early, give yourself the whole financial year to pay it off. Okay. So when Paris says this, so the financial year guys finishes 30  June, right? So. 30 June is when it's finished and your accountants can start prepping from July one.

Your tax isn't actually due to be paid to the ATO until the following May. That's right. So some accountants will do it early. Other accountants won't do it until sort of February, March, April ish. You communicate when you would like it done. Yeah. Yeah. So it depends. So. If you want to set yourself up so you know how much is coming in and you need to put it aside because you haven't put it aside, that's when you would communicate with your accountant and say, I.

Can we do it earlier so that I then can create a plan so that by the following May, it can be paid. Or also if you needed income and you know, you were going to get a refund, you could do it that way as well. Yeah. We're part of tax planning that ideally in May, June, inside the financial year, your accountant would tell you all of this.

Yeah. You really should know what sort of tax, what you're going to be liable for. So paradox planning, tax planning. So when, when should people be. scheduling their tax planning. So it should be done late May, early June completed. So yeah. So an accountant will usually. Sort of April start reaching out to everyone, seeing who needs it to gather.

What's what's needed. There is a, so then they can, it's like, so it means that when someone says tax planning, it means that Paris can look over what my last 12 months have been and be like, this is the situation that you're sitting in. So either, and she will give me different options to how it best will support.

Like she might say. If you've got it, let's put some more money in super, because otherwise you're going to pay it in tax anyway, or she'll say, you know, do you need to buy any assets? Do you need to buy any assets? Do we need a car? Because we need to write some more money off. So that's, I've never had that done pre Paris.

So that's where that kind of comes into it. So then you already kind of have a little bit of an understanding of what it's going to look like when the taxes are done. You lose, The ability to change things once 30 June ticks over. Yeah. There's not a lot you can do. So I've sort of. Feel stressed that people don't know what's going on until after the fact.

So yeah, and  you know, sometimes it's even cleaning up a balance sheet. There, there might be a bit of work that goes into it and we have to project. It doesn't always work out how we think it's going to work out, but it gives us the best possible  scenario to put you in the best tax position possible. So yeah, it's a, it's a must, I think.

And I, and so  the next thing is pay as you go tax. Yes. Pays you, go taxes you.  Your tax on wages, wages, your employer pays those. Yeah. Yeah. So you're the employer,  you pay your staff's tax. So every time you do your zero or your accounting or whatever, every time you pay your staff, if they're getting a wage of 1100 in hand, it might be like 1500 pre tax.

And so that, you know, three or 400, that all needs to be put aside because that's your pay as you go tax. That's definitely not your money. That's actually your employees money. Yeah. So that needs to be put aside because that's what is your pay as you go tax. So that comes once a month. Once, uh, depending, yes.

Depending on the size of your business. So yeah, once a month, if you're bigger and then quarterly, if not, yeah. So, yeah. So, um, so that number should always be, I always say to people, you know, even if there's. Two taxes or two things you can get on top of in the beginning if you're not doing is when you pay your staff, it'll give you an amount that is their super, an amount that is their tax.

Put that in a different account. Love that. Love it. Yeah. Yeah, yeah. It's the only way because that is not your money. Definitely not. Yeah. That's actually theft. That's how the money dress. See, that's the thing. I think that's so important. Like we talk about it all the time in terms of like tax money. It's not your money, but you're right.

That's not. You're not only not your money, it's somebody else's money. Yeah, not even the tax department. Yeah. So you need to really. We'll be getting your ducks in a row. Yeah. Yeah. And if cashflow doesn't support you putting that money aside, something's wrong. Yeah. Prices. Yeah. Decrease your stuff.

Something's wrong. Yeah. Talk to your accountant.  Okay. So another one in that is, so super is not with tax, but I always talk about super. Obviously I've just spoken about it then, and your super will come for you as well. You've got to put away your staff super, and you should be putting away yours as well.

Um, the other one is. Okay. So explain this one. Cause I, it took me a while once I found work, work these out. It's so funny. I used to think I was, it's not though. Yeah. It's not actually confusing. Once you understand it, I was like, Oh,  that's not so fucking hard to know. But I used to think it was so hard.

Yeah. So when we look at,  um,  No, I'll do one more. So bass payments. Yep. So GST paid GST is less GST collected. Okay. Yeah. So I'll explain that. Yes. Paris uses those big words, sorry, . So GST is 10% of everything that you've made in your business. So if you've made over the quarter, $30,000 mm-Hmm , your GST is $3,000.

That gets lessened by if you. So if you had 20, 000 of expenses and it had GST on it, that helps to balance it out, doesn't it? Because the GST on your expenses, the 3, 000 take away the 2, 000 and it would be, your GST would be 1, 000. Okay. So I say to people, if you can, Put away that full 10 percent because then you're always ahead.

So if you've made five grand in the week.  Put away for 500. Is that right? That's right.  Put away 500 and there's a good chance that you've got expenses on that. So it won't be the 500. You'll be, you'll be always ahead. If you've made a 20, 000 a week, put away 2, 000. Like it's things like that, that allow you to stay ahead so it doesn't feel so stretchy when those bills come for you.

That's right. So that's your GST component. You have to pay GST over everything over.  So if you're earning over 75, 000, you have to be registered for GST. And that, I think is important to know that that is before you, um, what's the word I'm looking for? Expenses. Any expenses. So like, if your business makes 75, 000.

Regardless of what you spent, the business, it's just, if it just makes 75, 000 and if you think of 75, 000, that's only about 1, 500 a week. So it's nothing. And if you need to be met, if any of you are so like you're listening and you're a sole trader, if you're making underneath 1, 500 a week, it. You shouldn't, it is not going to be successful.

You have a business. You may as well work for somebody if you're working 40 hours for 1500 because that all needs tax on it. That's your super on it. That's your holiday. You pay sick pay. So everyone that's listening pretty much should be above, above and should be GST registered. And it's a bitch, like it sucks paying more tax, but again, you can't fight it.

So you may as well go with it again. You're successful. That's why I keep looking at it. But okay. So then the last one, that one's the one I was getting my head around is when you quarterly, when your BAS comes in,  you also now get a. installment amount. Explain that. Okay. So not everyone gets it, but it's usually when you lodge a tax return with a tax payable that the ATO will enroll you in this PAYGI, pay as you go installment system.

So it means, so what that means is, so for example, you've been in business for a couple of years and the last year or In that income tax, we were talking about when you talk about income tax, it's your income tax. So say you made a hundred thousand dollars in income tax,  you would have to pay like 20, 30 percent of it.

So maybe 30, 000 in tax. Yep. And you, Come May when it's all lodged. It's 30,000 that you owe to the a TO. Yeah, the a TO then goes, hold on, I'm not gonna wait for this payment. No, we are now going to break that $30,000 into the four quarters so that you are paying installments over the year. So by the time it comes to you being due again, it's already paid.

That's exactly right. You're wonderful. Yeah. Couldn't have said it better myself. Yeah. Okay. Yeah, so, so then that why, it's why when your bass comes, yep. You're like, holy shit, there's a BAS payment, but then there's a pay as you go installment amount of paying pre tax. yes. And so your accountant, like this, that can be removed anytime.

Yes. You can decide not to pay that because it's a pre instalment payment. But I think the scary thing is, is if you don't pay that, it's still going to come for you. If you are still gonna owe that. Yeah. And you know, some, some clients put the money in a high interest saving accounts instead or something.

So there is other ways. Yeah. But if you are a stresser, which most of us are Yeah. Pay it if you can or pay. Yeah. Yep. Yeah. So listen to your account and you have to be really disciplined. Yeah. To be able to successfully do Yes. Uh, yeah. Use it to invest during the year or something. Yeah. Yeah. You've gotta be so disciplined.

Yeah, yeah, yeah. So, yeah. But pay it. Yeah, if we can, so yeah, so when I do finances with people, like we go through, obviously I've showed you different stuff that we do. We go through everything, but I then literally say, I need you to go to your account because I'm not an accountant. I understand it now, but I don't know other people's businesses and I always overextend how much they should put away than under because I don't want it to bite them in the ass.

But I always say to them, go to your accountant. Find out what your approximate BAS is a quarter, find out what your income,  like your,  what's it called,  income tax is, like find out what generally that is for the year, or what your installments are, find out your super payments, because if you can find that all out,  and then kind of lump sum it.

I then for a very long time,  I would say to Paris, am I putting enough away? Is this a good lump sum? And that would just automatically go into a different account so that any bill that came in could get paid. So I now did that myself. So in our new budget sheets that we were doing last night, I looked at how much tax I paid last quarter and I then.

actually forward thought, okay, I didn't put enough, like I didn't pay enough last quarter. So I was like, okay, how much extra do I need to add into this to work out what my bottom dollar is? Because if I just go off what I paid, it's not enough. It was 40, 000 more when it came to tax super and income tax.

So everything, because I never want to look at my bank account and think I've got all of this money. Yes.  But, oh, I've got this money and I feel safe, but a week later, 20, 000 of that is coming for me. So that's why I think it's really important in the early days and even for me now. Um, and the reason I say this and I'm not trying to like be blasé about it is  my business is owed a substantial amount of money from, Um, the settlement of my, um, property.

So,  you know, for the first time ever, you and I were like, let's chuck it on a, let's put your tax on a payment plan. And I have money there, but Paris also knows that for me, safety is money in the bank. So if anything happened, I can take care of my team. Like that's what it is about for me. So I will never run my business.

At not having any money in the bank. No, I need a substantial amount to feel safe. So even for me now, I'm like, I was really great for so long that I didn't need to have the double accounts because there was always money there. But for my mindset now, because I'm waiting on that money to come back into my business, I'm like, I actually need to start putting that away again so that I can kind of feel comfortable with where things are at. 

It's a really good way of being like, that's not my money. Every week, instead of going, Oh, because I think that's what happens is people look, and I did this for years, guys. Like this is when I really started to understand my business financially. I did this for years where I was just like, I would finally feel on top of it. 

And this is when my, my basses would be like four grand. I'd finally feel on top of it and, and my bass income tax. And I'd be like, yeah. And then that I'd get a bill for four grand and I'd be like, they're taking all of my profit. And it's like, no, bitch, your cell, your spending, all of your fucking profit, stop shopping at a days, stop buying all the things.

And I still do that. Now I've had to have an absolute, like in the last  I reckon I've given myself a complete audit as well. In the last 24 hours, I've given myself an audit to make me go, hold on. Because as business owners, when there's funds there that we're just used to spending, it's like, you need to hold this up.

First of all, you need to put it away so that you don't have a, you know, a.  Um, payment plan, which guys, I'm gonna preface that I don't need it, but, you know, I'm obsessed with that money, the bank, and there's nothing wrong with that. So I know a hundred percent, but there's no interest on the one that way it's, there's nothing wrong with it.

Yeah. We are using the a TO. Yes. You're so Paris. I know it's uncomfortable for you. I can see you squirming. You hate it. And I was like, I hate it. And there's money there. I could pay it. I'm just choosing not to Yes. At this point because it allows me to keep money in the bank, but I just think like there's.

Now that I understand it, and this is what I say to a lot of people, like we fear it because we don't get it. Yep. We don't do it because we don't get it. We put, bury our heads in the sand because it feels hard. As soon as you know, these numbers, the empowerment behind it is massive. Like even for me in the last, I've just finished the budget sheets.

It was like budget sheet  362. I swear to God, Richard just sends me a new one each and every fucking day. And then I have to upload it. Last night I was like, Oh, that's so exciting. Sorry, Rich. I'm holding a coffee this whole episode because I'm that fucking tired because these budgets, last night I was like this. 

So it's been really interesting, even for me, even though I do this. to check back in because it's been a while since I've checked back in on the finances side of it, but I can also keep coming back to Paris and being like, what is this? What is this? Yeah.  I would also love you to explain, because I think a lot of people have this and they don't understand it.

And I never understood it until I started seeing you. But I think also people over time might start hearing this word and not understand what is a Div 7 loan? So Div, Division 7A loan is, why are you laughing? A dirty word for a Uh, a loan between yourself and your company as a director. So director's loan.

So if you get to the end of the year and it happens a lot, particularly with new clients that I get on board, and you've spent too much out of your company, personal spending, can't pay it back, then we set up a loan. It goes over seven years. It's a loan on paper. So you don't sort of, you do have to put the money back in, but we, we can take it from there.

So that's sort of income over the seven years you pay interest on it. So I think it's about 5 percent at the moment. So it's a conversation you need to have with your accountant at the time. So when your accountant's doing your end of financial year, this is sort of after 30 June, then we go, we've got this issue.

So can we pay it or can we issue extra wages? We need to declare the income somehow. And if I don't want to do that. So when I pre coming to see you,  that's how my accountant. Said to work. So I didn't pay myself a wage and didn't pay my taxes on my wage. So I just paid myself.  Whatever. Yeah. You know what I mean?

Like I just took, whether it was 2, 000 and it was always just through the loan, like just on direct and I didn't understand what any of that meant. Right. I understood what none of that meant and then never paid myself properly. I just took what I took. I don't know. I don't understand it. I didn't understand it back then.

But then when I started seeing you, you were like, Oh no, this is not what we're doing. Yeah. We're going to put you on a wage that suits and that you can, you know, because then. With my staff's taxes. Mine gets paid as well. So I don't have to worry about that money that I'm not paying to myself with mine, that might tart.

Perfect. That's done. I don't have to think about it. And then any additional  amount that I take. Then I just pay the tax on that. But generally I've gotten some put aside or it's goes through, you know, trusts or companies or whatever, you know, whatever this fucking magician does behind the scenes. Bye.  I think that's super scary because, um, and the same thing happened to my partner is  we don't know how to do it.

So then over time, you're just having this massive loan. I remember when I saw you one time, like before I started seeing you, like my tax, my income tax at the end of the year was a hundred thousand dollar bill. And you were just like, And I was like, why can I never get ahead? I'm putting away such huge money and then I'm still getting a huge bill.

I don't understand how I can get ahead of this. And then when you started doing it and I went on wages and I understood it more and stuff like that. Now it's like. You know, my bill might be 25, 000, 30, 000, not 000 difference, guys. And literally, you're spending the same money, you're literally just not spending from the company, you're getting a wage, you're spending from your personal, yeah, yeah, yeah.

And when you're declaring a wage for yourself, it also reduces your net profit. Um, which reduces your tax. Yeah. So it's, um, it's genius. So I say to anyone that has, that can, I'm like, just pay yourself a wage. It's easy. One question I'd love to ask you, because this is something we do a lot with solo.  Is with my solo artists that, um, are sole traders, um, or anyone that's a sole trader before, why would you, at what point do you become a company?

Is it best to become a company? It's sort of, there's two sort of. I've got a couple of flags that I like to see when you've got money in the bank, always. So when you're on top of everything, managing everything, looking at your personal spending, and then I'd say 80 to a hundred thousand dollars sort of net profit.

Yeah. Okay. Yeah. So, um, we get that 25 percent tax cap to tax rate. So, but it also, when you're a sole trader, you can spend willy nilly. There's no tracking, there's no direct alone, you know, you can get away with, you know, Taking all the money out. As soon as you become a company, anything you take out has to be, has to have tax paid on it.

It has to be tracked. So it is a bit of a dicey one and there's no one answer. Shouldn't you be doing that anyway, though? Like shouldn't you be tracking everything anyway? Well, yes. As a sales Canada, Um, but not many people do. So yeah, no, you're amazing. I wish I could show everyone your spreadsheet  warmed my heart. 

So  I say to my Solis  take, cause they don't pay themselves a way. No. Yeah. But I say, which they pay yourself a way. Yes. That's what I say. So fine. Work out if you're going to pay yourself. 1, 200 in hand. Cause that's what you need to live. Find out what the tax would be on that. If you will. working for somebody.

And if it's like three 50 or whatever it is, put that amount aside. Oh, that's amazing. And then just pay your wage like normal. And it'll allow them constantly to have, it's the same way I've just set up Lee, my partner. It's like, if you need this much money, then you pay yourself this much money. And then we put this much.

Cause I know that's, cause I looked at through my zero, That is what we put aside for your tax. That's what we put aside for your super. We put aside your holiday pay. We put aside your sick pay. Because I think a lot of people go, well, I'll take 1200. Yeah, but it's like,  okay. Like if you're, if you worked for somebody and you made a thousand dollars for somebody, On top of that, 1, 000 your tax is paid, so it might be 2.

50 on top of that. On top of that, they pay you two weeks of sick leave a year. On top of that, they pay you four weeks of holiday a year. On top of that, they pay your 11 percent of super a year. So, if you think you're killing it because you're paying yourself 1, 200 instead of 1, 000, but you're not putting all of these other things aside, you're not.

You're ripping yourself off. You're ripping yourself off. And you're also doing all of the other hard work that comes with it. So, what you need to work out is. And once I do this with people, they realize that 1, 200 is more like 900. And they're like, Oh my, like, I'm like, because when you work for someone, you don't actually see all of that.

But your wage is not just 1, 000 that you get in hand. Your wage is the 1, 000 you get in hand, your tax, your super, your holiday pay, your sick pay. Yeah. And the not responsibility of running a business. Yeah. So it's actually, you need to be making 1, 900 to grand for you just to make that basic amount. So this is why I'm saying it's so important that you're running this business so that it is profitable.

Otherwise, you are working harder and you think you're making it, but the tax will come for you as well. And so will the fact that you don't have sick pay, holiday pay or super. Yeah. Yeah. Which is amazing. Not enough people talk about it. And it's so good. Like there's nothing.  As like the feeling when your accountant's like, here's your tax bill.

I'm like, okay, I paid it. Oh my God. What?  Me too. Cause the worst thing for an accountant to ever have to do is to tell a client they owe money. So we're meant to get rid of it. So the greatest thing is when you get refunded. Well, yes. So I, because again, so people go, how do you get a refund as a business?

So that. Amount that the a TO is thinking that you'll pay. So if the a TO, if the year before you've paid a hundred thousand dollars, the a TO puts you on a payment payment plan. So you have to pay $25,000 a quarter. So by the end of the year it's paid. Mm-Hmm. . If it's not a hundred thousand, it's 50,000.

That's when you get a refund from the a TO. Yes. Yeah. Yeah. So last year I got a good refund. Mm-Hmm. . This year it was fucking annoying because. Again, when you are in a part, when you're like with, when I was in a marriage, you can do things to like, yeah, save on tax, save on tax. And now it's just me. Yeah. So I actually had to pay 30, 000.

Oh my God. More in tax. And Paris was like, I'm sorry. Thank you. But I still got a refund from the company. So things kind of balanced out a little bit. And now we're aware that that's going to be the way it is for now, so we can plan for it. Yeah. So I think sometimes like. It would be better for anybody.

That's why I tell people to put more tax away. Imagine coming to the end of the year and getting a refund. That's like, imagine you're an accountant going like, you've got 10, 000. But it's like forced savings. And I do have clients too, that they just pay an amount to the ATO every week because they're like, I just want to be in credit.

And I'm like, I completely get that. It's a smart decision, you know? So, Um, you know, whether it's doing it that way, whether it's doing it, um, by having a different bank account, but really the most, the biggest piece of advice I can give you is just. If you don't have it with your accountant, find an accountant that you can have those conversations with, but I can constantly go to Paris and be like, and we haven't even scratched the surface.

Like you and I, with what you and I want to do with, you know, um, looking at stock, looking at all the different things. The other nice thing for me that I'm going to say guys is.  We've had this conversation multiple times about how this last 12 months in business has looked very different. But the nice thing for me was Paris was able to say to me the other day.

everything else is on par. So your income, yes, in your business has dropped, but everything else dropped with it as well. And nothing is red flagged. So it's not like I'm making less and all my expenses are still high. Everything just simmered. Everything either grows together or everything simmers together.

So that was a really nice, okay, I'm paying less in stock. I'm paying less in wages. I'm playing less in expenses. And my income's less, but I'm paying less. It's not like I'm paying more and my, my income is less. Otherwise we're still going to tweak though. We're tweaking for sure. Next Tuesday we are sitting down and tweaking.

We are tweaking. And this is what is exciting because again,  what I want to get out of things working together with you is. You know, how can like teach me more because I don't know, teach me more, teach me how to do this better. And, you know, we always go through points. Like I wish that I knew what I knew now, you know, 10 years ago, but I know that I, I'm going to wish that I,  in five years time, I'm going to wish I knew now what I knew, know in five years time.

And it's just the excitement and the evolve. It's so exciting. You know, like of how can I change things? Yes. Yeah. Budgeting, cashflow. And now I'm about to embark with Jen as well, which is exciting. So yeah, even when we started Selen Rising, I said to Rich, this is our girl. Yeah. This is our girl. I was feeling the love.

But it's also nice, like our, With Salon Rising in the different structures, it has, you've been able to support that as well. So that's been super cool. Cause there's more people in Salon Rising and you're able to go like, this is where it should be. And yeah.  We all feel like we have our financial person on our side.

Yeah, no, it's um, yeah, you just, you've got a, you've got a vibe, I think with your accountant, so, or your bookkeeper or your person. So do you think like when people are looking, do you think that's the most important thing they should be looking for? Yeah, I do. I don't know how successful you can be sometimes, but I think you have to, you have to trust them that you're putting your whole life in their hands.

So a year of bad. And that's why I say to people, you need to know it because if I knew it, if I understood it, potentially I would have gotten, I would have done things differently. So  Paris, and so, and if you are unsure and you're like, I don't know if my accountant's doing the best job, go and see another accountant, get a second opinion, like find an accountant that you're like, no, that feels like a vibe.

I just wanted to say, like,  it's not that. You're accountant was doing it wrong. That's what I was thinking. Yeah. Maybe you haven't doing it differently. Yeah. Yes. And you might not have asked the right questions because you don't feel comfortable. 100%. Didn't. Yeah. So I won like he set me up in the beginning and I was so lucky to have him because I felt I trusted him and felt safe.

100%. It's not that my, your, your accountants doing anything wrong or my accountant was doing anything wrong. He's brilliant. It's just, he was doing it a different way. And because Like, I, like, I don't know for me and it makes sense. I'm so female based. Well that's right. I'm such a lover of like, I'm like, surround me with women to fight for me.

Like it's the same with my lawyer. Like I couldn't have gone with a man. I need a woman. No. Yeah. And I think that for me the same way. So I probably was wrong. It was, I found it way easier to be way more vulnerable with you. And also with this, all this stuff that's happening now, when it comes to lawyers and stuff, I just feel safe because I feel really understood because Paris understands me.

So I guess the thing for me, and it's not for everybody, like some people are going to be like, Oh, Samara, I don't need that. You're too much, but I need it. So  why, so is there people that the way that was structured would have been really good for like, is there. Like, why would you, why would you do that kind of, um, set up as opposed to paying yourself a wage?

So, um, what do you mean? Sorry. So, you know, when we're talking about like, we changed from the director's loans to the, um, to paying a wage, like, is there a circumstance where that would be the right thing to do? No. So, and the laws change. You're just specifically talking about a company. Yeah. Yeah. The laws changed a couple of years ago. 

We were able to allow clients to live off their director load and then use. Uh, service fees where we could get, so the company tax return would have money on it that we needed to send to the director. They've taken that money and we could just send it to the director's ABN and it could sit there and that's fine.

But then we wouldn't, we're not allowed to do that anymore. So, yeah. So even that way that that was, it's not. So I've sent It's like what Samara's previous accountant was doing at the time was probably the right thing to do. Yeah. And yeah. And we had a big shift in our office because the law didn't allow us to do that anymore because it was cheeky.

So yeah. So now we were forced to not for people to actually pay themselves a wage. But yeah. So yeah. I think for me though, even, and I guess, and again,  I don't, I put. All of that fault in my hands. I don't put it in my account to say, I don't, I didn't know. I didn't learn. I just blindly was led because I didn't understand it.

And I was taken care of for a really long time. I was really lucky. And, but.  I think because I didn't understand it, I also wasn't taking from the business properly. I didn't like, I wasn't so once I was like, okay, I think I can do this differently. And I think I need a different opinion. That's when things started to click and change for me.

And I was like, oh, that's good. Oh, I understand that. Oh, okay. That's a better way to pay myself. But I also really struggled with, and I'm sure, and I still do at points to this day, but I definitely struggle with, um, when you're a business, like when you are an employee and you work for somebody, you get that set, you know, 1, 200 a week and that's it.

So that's what you live off. That's what you can budget. That's how you can save when you're a business owner and there's more surplus funds. You're not as good at that. No. So you make more, you spend more. Yeah. And you know that like I can spend. Yeah. You can spend like no one I've ever met can spend and you deserve to, but do it safely, but I don't, and I do, but I'm like that money could be going towards  building other things, but when you have a business, until I started to get my wage, I was like, it's really hard  without paying yourself a wage to pull yourself into that.

And it's hard within a business as well. So for me, that's what I was saying before. I am at a point now, which I think I will look back in six months time and be like, what the fuck was I doing? But I think I spent 900, 850, like, and I, this is not just me, my team are bad for it. I spent 850 on Uber in three months.

Eats. Yep. Oh God. What? Yeah.  But, staff amenities.  What? Well, I buy, at least once a week, I buy my lunch on Uber Eats. Yeah.  And it'd be like 40 bucks.  Cause I don't want Maccas. I want like a Daboon salad,  right? And that's, and then add, add  like in that. So that's 50 bucks a week, right? So that's already 700 or 500, 600 just on that UberEATS, right? 

Once a week when I'm in there, that's my treat. Once a week, I buy myself the bagel and the coffee and then add a couple of. Uber Eats where I've bought the girls coffees or I've bought, um, that might be like travel as well when we've been away or I've Uber Eats to home with the kids. It came to 850.  So it's so easily it adds up.

And believe me, my Uber Eats bill is nothing on Laura and Indy's. There is way more for my team that they spend on Uber Eats than I do. It's once a week. But 50 bucks once a week for 13 weeks, there's six 50. But if you're only buying once a week for yourself and you're bringing from home the other days, no.

See, that's not what I can have. No. Okay. Then. So yesterday, 'cause I was like, I've realized, like I've started to have these realizations again because I need to reign it in. Yesterday I was like, I'm not buying myself lunch. Oh God. And I forgot to pack lunch. So yesterday I ate three pieces of rocky r and a Banana 

Two coffees, it was free. But now I realize that, did you crash? Now I realize that because I'm trying to not spend money. Yeah. I'm eating like shit , because  my, I'm about to get real fat because whatever is available at my hands that I don't have to spend money on, like I'm on a money diet. I love that. And not a health diet.

Now that I'm like, this is gonna be, it'll balance. Watch this space. It'll balance. Yeah. Well, thank you. Thank you. I love you. What an honor. I could talk to you about tux all day. I I didn't think I'd ever say. How do we find Paris?  How do we find Paris? Paris is like you don't find me, I'm so busy. Paris is like, where are you?

I'm just working with Jen and Samara and that's it. 

I am the sole accountant for LaSorella. I will include in the show notes, how we find Paris. Thank you. So thank you. People can reach out and she can tell them that she too busy,  but I can answer questions as well. I can do a little bit of help as well. Yeah. Yeah. I want, I want people to be you. I want them to grow and enjoy it.

And yeah, let's, let's make tax fun. Paris is like, I want to nurture all of you. I want to, yes. Come on. What a catchphrase. Let's make tax fun. Everyone's like, okay,  tax is fun. I'm like.  I don't know if I'd call it that, but okay. Making money is fun. Making money is fun. Yeah. You're only paying tax if you're making money.

That's right. Yeah. Oh, wonderful. Thank you so much for joining us today, Paris. Thank you. It's been a pleasure. Love and appreciate you. And we'll be back with more for everybody else soon. Bye. Bye.