If there is real work performed, and payment is at market rates, then the short answer is YES. Although minors under 18 can only earn $416 from investment income before being slugged with massive tax, they can however earn income for effort i.e. wages, without this tax problem. For example the 15 year old who works at McDonald’s. The same applies for a small business. If your child genuinely works in your business, then you can legitimately pay them a wage and they can access the tax free threshold, which on low income levels means they will probably pay no tax.
Some examples of genuine work might include:
- Office admin, filing, printing, binding, cleaning
- IT support with computer patches, upgrades, security
- Assisting tradesman on say Saturdays or on school holidays
- Marketing, website, letterbox drops
- Warehouse packing, shelving, stocktake
Keep in mind the issue of market rates and have a proper basis for calculation, e.g. hours worked x market rate, and keep records. If you would like to explore this further or have any questions feel free to contact us.
