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Funny thing I found out about this recently - my country has a tax model where very small businesses (defined by revenue < threshold) only pays a small flat tax

Funny thing I found out about this recently - my country has a tax model where very small businesses (defined by revenue < threshold) only pays a small flat tax - comes down to a few %. You cross that threshold and you're in the standard tax brackets which is a big jump + regular accounting, etc. So this forced me to settle for a number at which I'm happy with my income and I can have a clear goal for that year - once that is achieved other things come in to play. This seems basic and maybe it's just me but I never really had an idea of what I wanted to make, what is "enough" - I would just say yes to any opportunity that came my way which paid more and kept plowing forward - but there is a limit to how much you can do and it's hard to guess it before you reach it so I ended up pulling all nighters and working through weekends more than once. Now that I have my limit it's actually pretty easy to reach with ~210 regular work days according to my current rates for a really easygoing client - this leaves me with plenty of time for other stuff - if I find a better paying client I just work less for that year - I like this model.

xchaotic 7y ago
Even with paying the accountant and even if the higher bracket was 90% you’d still be making more by earning more. It’s hard to agree with your line of thinking but I have seen this often that people are willing to sacrifice quite a lot of money for “security” and “peace of mind”. In practice you’d have more peace of mind with more money in the bank.
- rubber_duck 7y ago
  >Even with paying the accountant and even if the higher bracket was 90% you’d still be making more by earning more. Maybe I should describe it better - it is a special tax model - you pay a flat fee if you make less than X and that flat fee turns out to be ~5%. When you cross this threshold you no longer qualify for this model at all - you have to convert to standard taxation - I would need to increase my revenue by 20% just to break even and the extra hassle of doing that would mean that I need to increase it by 30% (at least) to be wroth it. So in my situation it just turned out to be a good limit where if I negotiate 10% more I just convert that money = free time for other stuff. I don't plan to stay below this limit forever (in fact next year I plan to go over) but the concept of having a target income goal and then letting the rest of your time go to personal life is really good for work life balance IMO.

xchaotic 7y ago

Even with paying the accountant and even if the higher bracket was 90% you’d still be making more by earning more. It’s hard to agree with your line of thinking but I have seen this often that people are willing to sacrifice quite a lot of money for “security” and “peace of mind”. In practice you’d have more peace of mind with more money in the bank.

rubber_duck 7y ago
>Even with paying the accountant and even if the higher bracket was 90% you’d still be making more by earning more. Maybe I should describe it better - it is a special tax model - you pay a flat fee if you make less than X and that flat fee turns out to be ~5%. When you cross this threshold you no longer qualify for this model at all - you have to convert to standard taxation - I would need to increase my revenue by 20% just to break even and the extra hassle of doing that would mean that I need to increase it by 30% (at least) to be wroth it. So in my situation it just turned out to be a good limit where if I negotiate 10% more I just convert that money = free time for other stuff. I don't plan to stay below this limit forever (in fact next year I plan to go over) but the concept of having a target income goal and then letting the rest of your time go to personal life is really good for work life balance IMO.