Setting aside tax
When an invoice is paid, part of it is not yours. How to choose a rate, where the money goes, and what Clementine does and does not do with it.
In the app: Work; Tax, Summary
When a client pays you, the whole amount lands in your account and all of it looks spendable. Some of it is not yours. If you are registered for GST, one-eleventh was collected for the ATO. And nobody has taken income tax out of it, the way an employer would. Setting it aside on the day it arrives is how the tax bill stops being a shock.
Invoice 0042 paid
A$1,320.00
- GST One-eleventh, put aside in fullA$120.00
- Tax 25% of the A$1,200.00 leftA$300.00
- Move to TaxA$420.00
- YoursA$900.00
Give the money somewhere to go
Make a savings goal for tax under Save, Goals, and keep it in an account you do not spend from. A separate savings account at your bank is the usual choice. Clementine tracks how much of that account belongs to the goal.
When you record a payment
- Open the invoice under Work, Invoices and choose Record payment.
- Enter the amount received.
- Under Set aside for tax, enter how much to take off the top. It goes to your tax goal.
- The remainder is shared across your other goals the way you usually split income, or left as spare funds.
How much to set aside
- GST. If you are registered, all of it: one-eleventh of what you were paid. It was never yours, and it is due with your next BAS.
- Income tax. A percentage of what is left after GST. Clementine starts from 25%. That is a common starting point, not a recommendation for you. The right figure depends on everything else you earn, because a salary uses up the lower tax brackets first.
To see whether your percentage is about right, open Tax, Summary. It estimates your tax for the financial year from the income and deductions you have recorded, and shows what you have set aside against it.
What the estimate leaves out
The tax estimate uses resident tax rates and the Medicare levy. It is only as complete as your records: income you have not entered is not in it. Check the summary page for what it does and does not include before you rely on it.
Still being built: a suggestion for every paid invoice
The next version does the sum for you. Each time an invoice is paid, Clementine will work out the GST and the tax on it, show the suggestion on Home and in Work, and offer to remind you to move it. You will be able to keep your own percentage or have it estimated from your tax records for the year so far. It will still never move money itself.
Keep reading.
- Exporting your data
Download everything Clementine keeps for you as one zip: a spreadsheet for each kind of record, one JSON file and your receipt photos. Free on every plan.
- Getting set up
Guided setup takes you through fourteen short steps, and every one of them can be skipped and picked up later. What each step is for, and what to do first.