😬 Taxes, right? We reckon we all use the roads, schools, hospitals and so on, and tax is something we should all pay (we certainly pay plenty!), and we discourage tax avoidance.
First, a gentle reminder that as you’re not an employee of ours, your taxation is your responsibility to administer correctly – not ours.
We’re a Dutch company, and we are required by the Dutch government to report payments for work made to all contractors (which includes models) each year, to the Dutch Tax Office. We do not report reimbursements (that is, where you incur an expense and we give you money for it, like an STI test) – only payments for work you did with us.
We securely provide the Tax Office your name, address, and total amount paid this year. They are not clear what they do with this information (anecdotally, it does not seem like they do anything with it!).
We’re not accountants, but we work with many models who ask us accounting questions, so we asked our accountants for their advice on this. Their answer is, it’s complicated. 🙄 It depends on what country you live in, what the tax requirements are there, how much you earn from modelling, and how much you earn from other things you do (eg, your “day job”), your age, and a few other things.
So, the official advice from us is, ask your accountant. 🤑
The good news is, in most western countries, people are can be allowed to earn a certain amount of money each year that they do not need to pay tax on (this might be called a “tax free threshold” in your country, or something similar), designed to let you earn a small amount of “fun money” from your hobbies. If you have a full-time job, you’d usually claim this from the salary / wages you get from them when you started working there, but it varies by country.
The amount of money you can earn without having to pay tax on it varies, but is usually under US$10,000 a year – it may be lower or higher for your country. Some models we work with earn less than that in a year from their modelling work, so they don’t have to pay any tax (but they still have to report their modelling income to their tax office!).
So, when you go to do your tax, let your accountant know how much you earnt from your “hobby” (no need to go into specifics, but if they ask, you can just say “modelling”), and ask them if it’s possible to declare this income as being from a hobby so you pay less tax.
If you’re concerned about this, it’s best to ask them before you spend your modelling earnings, otherwise you might get a nasty surprise at tax time (that is, you might have to give 30% of your modelling fee earnings to the tax office! 😧), so maybe you want to email your accountant now? We recommend copying and pasting this – but you’ll need to make some edits:
Hey Bob,
I heard this one the other day: what does an accountant say when boarding a train? ‘Mind the GAAP’. 😀
So, as a hobby I do some paid modelling work, and this year I’ll earn around $2500 from it. I am not sure if I need to pay tax on on that?
One of the companies I work with said I should ask you about “tax free thresholds for hobbies” (they said, it depends on which country I am in, and some other factors, so they cannot actually advise if it’s relevant for me – they said I should ask you).
Can you please let me know – if I do need to pay tax on this income, roughly how much should I keep safe for that?
Thanks!
Becky
(It’s always good to start with a joke, right? “GAAP” stands for Generally Accepted Accounting Principles, standards for accounting that are used all over the world. It’s pronounced “gap” – like the announcements at train stations – and it’s something accountants have “mind” all the time in their work! 😉
Anyway, we send you a copy of each Release form from each shoot you appeared in (showing how much you earned for that shoot), but email the Model Liaison for a report for the financial year if you need one (be sure to let them know what the financial year dates are in your country – they vary!).
Also, please let us know what your accountant told you – we’re nerds like that. 🤓
