How to set up Super for Contractors without making them Employees

Vickie Wesolowski

We are a (very) small Regional Council in WA. We have 12 Councillors who we pay meeting attendance fees to bi-monthly. I've always treated them as suppliers and raised bills when their payments are due. Unfortunately after next month we will be required to pay them superannuation as well.

I don't want to set them up as employees (we don't deduct tax, they're not entitled to leave and payments are assigned to different cost centres to wages). Does anyone have any great ideas for what would be the best/easiest way to handle this? The only thing I've been able to think of is to create a new cost centre for the super, calculate the amount manually and apply this to the new code. Any better ideas?

klaura

Hi @Vickie Wesolowski,

You may want to check this thread here. It might help.

how to set up super for contractor in reckons rather than setting them up as an employee — Reckon Community

Best regards,

Karren

Vickie Wesolowski

Thanks for the speedy response Karren.

One of the reasons I'm reluctant to set them up as employees is that I don't want my reporting skewed by their inclusion, i.e. showing that we have 16 employees rather than 4 actual ones. If I run a Payroll Summary report will they be included?

klaura

Employees are exempt from STP reporting but will still be included in reports within Reckon.

Vickie Wesolowski

Thanks Karren but that's what I want to avoid so I'll need to find an alternative method.

Acctd4

@Vickie Wesolowski You can filter (& Memorise) your reports - including the Payroll Summary - to just include the actual employee names :

😊

The benefit of using this method is that all the Super is tracked/reported together for you, allowing you to create your standard Payroll Liability Cheque for all of it.

The other option is to add the Expense account & minus the Liability account on the Bill/Chq itself … but this means that:

1. You'll have to manually calculate the amount to enter each time &
2. You'll have to enter their super payments separately to everyone else's (when presumably, you pay all the Super together 😬)

Vickie Wesolowski

Thanks Shaz. I'm still a bit conflicted as I can see pros and cons for both methods. I'll be paying employee super every fortnight but only paying theirs bi-monthly. I'm not even sure how Reckon will deal with that.

Acctd4

That shouldn’t be a problem as you can create & filter (& then Memorise) your Super reports accordingly, too 😊

… Just curious as to why you don’t want to pay the Super altogether though ? 🤔

Vickie Wesolowski

The Councillors are only paid bi-monthly, in arrears, so that's how we'll be paying their super too.

One of my other issues is that 90% of the time Reckon doesn't create my payroll ABA file correctly, I have to open each pay cheque and close it for the data to populate. It's frustrating enough doing that for 4 entries, it'll drive me nuts having to do it 16 times.

Acctd4

Have you verified & rebuilt your company file ? There could be some corruption that’s causing that as that shouldn’t be the case 🤔

Vickie Wesolowski

I haven't but I'll give it a try ☺️

Acctd4

Do the Rebuild THREE times (for some reason, 3 rebuilds can fix a lot of issues 😊)

Vickie Wesolowski

A bit strange but I trust your advice on this and did 3 x rebuilds (now I have to wait a fortnight for the next pay run to see if it works).

Acctd4

There’s no guarantee, but it’s the first step to take & is often sufficient 🤞🏻🤞🏻🤞🏻