Setting up a contractor to receive Super

Laurelle Searle

Does anyone have a step-by-step instruction for me to follow please

Zappy

I dont understand what the problem is. Put the bill in for the sub contractor. Add the superannuation with a credit to the liability account. Pay the liability account when you pay the super. Almost nothing could be simpler. The alternative is to not withhold super and make the contractor responsible for it. Its his money.

Acctd4

Hi @Laurelle Searle

Are you an employer (eg with employees on payroll) & is the contractor GST-registered ?

(The most streamlined option is to set the contractor up as an Employee (with no PAYG & excluded from STP). This allows you to keep all the super processing/clearing house payments together 😁
if the contractor is GST-registered though, this option is less favourable as GST can’t be facilitated via payroll)

Zappy

@Acctd4

Surely the GST is irrelevant

Contractors aren't covered by SGC

Why would you make them an employee?

Surely it's more administrative burden for a single contractor

Who is claiming the deduction?

I'd make the contractor responsible for his own super

You know it makes sense

Zappy

Laurelle Searle

No, they are not at the moment but that may change is a few months.

Acctd4

@Laurelle Searle

If you'd like to email me direct, I'll send you my help guide I've written up on this ☺️

Zappy

@Laurelle Searle

You are making this way more complicated than it needs to be. Arent we busy enough already? If the contractor wants his super, let him pay it. And his work cover and his insurance and his payroll tax as applicable. I dont know why you need to burden yourself

Zappy

Peter Lawrie

i will step in here - the ATO has set that all contractors in the media and arts have their super paid by the one that has engaged them for work GST or not - only exemption is if they run as a trust or Pty Ltd - it does not matter if they are on 5 hours a wek on average or 20 hours - it is the same as a blanket ruling..

here is link to ATO - it cannot be dismissed and unless someone able to point out the overhead this causes, there is no way of getting out of this:

https://www.ato.gov.au/businesses-and-organisations/super-for-employers/work-out-if-you-have-to-pay-super/super-for-independent-contractors

Acctd4

https://community.reckon.com/discussion/comment/20651474#Comment_20651474

Paying SGC on NET payment (eg excl GST) is a compulsory requirement - covering many service-based contractors - & has been for many years @Zappy 🙄