I am going to work as a contractor and charging $40 an hourly rate. Do I include gst in this amount of do i add the gst on?
its up to you.
I presume you ARE registered for GST???
so if this is yes, then your hourly are is going to be one of two things:
1: $40/hour INCLUDING GST (ie $36.36 per hour plus $3.64GST = $40)
2: $40/hour PLUS GST (ie $40 per hour plus $4 GST = $44)
you need to talk to your clients about what they want to pay. If the client thinks they are only getting a bill for $40/hour TOTAL and they get a bill for $44/hour TOTAL then they wont be pleased.
I am guessing that this is not the only question you are going to have about GST, so PLEASE find a good bean counter to advise you BEFORE you get too far into this arrangement. You will be heaps better off knowing exactly what you can and cant do before you rack up a heap of GST liabilities without knowing it.
This is a really important thing to get right. If you don’t mention GST then your price is legally required to be inclusive.
It probably depends who your clients will be. If they are mostly consumers I would quote $44 per hour if they are businesses, I would quote $40 plus GST. Same end result just a different perception
Good luck with the venture