learnfinancewithNIL Money, Planned · session 4 of 13 · 25 min
NIL Pay Is Business Income
- Explain why the full NIL payment is not the amount you get to keep.
- Tell job pay from NIL pay by who sends the tax in.
A job takes taxes out before you see the money. NIL pay does not. The whole amount lands, and the tax is still owed. That is the biggest surprise in NIL money.
Most NIL pay comes to you as an independent worker, not an employee. The payer sends a form at year end that says what they paid you. You report it. You send in the tax, including a part an employer would have paid for you.
A brand pays Ⓛ5,000.00 for a campaign. Your account shows Ⓛ5,000.00. How much is yours to spend?
Pick your answer first, then open it.
Less than Ⓛ5,000.00. Tax is still owed on it, and you are the one who pays it.
✓ Right. The number on the screen is before tax. The number that is yours is after the reserve share moves out.
All Ⓛ5,000.00. The taxes were handled.
Nobody handled them. No employer stands between you and the brand, so no one took tax out. It is still owed.
None of it until April.
You can spend from it. The point is to move the tax share out first, so what is left is truly yours.
| Question | Job pay | NIL pay |
|---|---|---|
| Tax taken out before you see it | Yes | No |
| Year-end form | W-2 | 1099 |
| Who sends tax to the government | The employer | You |
| Extra tax for working for yourself | No | Yes |
This week
Find the tax form from your last NIL payer, or ask them what they will send. Put it in one folder, paper or digital. That folder is now where every NIL document goes.
Next in NIL Money, Planned: Paying Taxes Four Times a Year →