How to setup an independent contractor for super payments in ReckonOne

Hi folks,

I have a new independent contractor that I need to pay super for (due to the work being done and the ATO rules around when they are considered an employee for the purposes of superannuation).

I've found references about how to set this up in Reckon Desktop, but cannot find any how-to guides as to how to set them up in ReckonOne (and the new Payroll module).

I need to ensure that:

I'm not withholding tax
I'm calculating and paying their super based on the invoiced amount from the contract
I'm not accruing the super as a liability (which seemed to be a discussion point in the other examples of how to set this up).

Thanks in advance,

Danny.

Accepted answers

Rav

Hey @dannyIFPL

Checked in with some folks internally in regard to your query and have a bit of info for you.

Before getting into anything, I just have to make it clear that I'm speaking purely from a Reckon Payroll feature-perspective only. I'm not an accountant or bookkeeper so please be aware that anything I advise is not qualified taxation or accounting advice and you should confer with your accountant to ensure what you're looking to do is correct.

I'm not withholding tax

If you want tax to calculate at 0% for this employee, then you can set the employee's voluntary rate to 0% in their profile.

I'm calculating and paying their super based on the invoiced amount from the contract

Super guarantee will calculate on any ordinary earnings setup to accrue super.

By default it will calculate at the statutory rate however you can either override this calculation to instead use a custom % or a custom fixed amount. You could use the custom fixed amount option to enter the amount of super based on your requirements.

I'm not accruing the super as a liability (which seemed to be a discussion point in the other examples of how to set this up).

I can't really advise anything on this one unfortunately, an accountant is probably better placed for insight on this particular point.

Again though, I need to make it clear its highly recommended speaking to an accountant to ensure your setup satisfies not only your requirements but is also compliant. We have a range of Reckon Accredited Partners that you can reach out to using our Partner Search page here - https://partnersearch.reckon.com/

All comments

Rav

Hi @dannyIFPL

I'm not 100% sure of the answer to this so I'll just ask a couple of questions and see if I can get a bit of insight from some colleagues.

Have you already created this employee in Reckon One? If so, have they already been included in any pay runs and STP submissions?

If the employee is already setup, have they been setup with the Voluntary Agreement employment type along with the contractor's ABN entered in their tax details?

dannyIFPL

Thanks @Rav

I've had a go at setting up the contractor and did use the Voluntary Agreement employment type, and have included their ABN.

I tried to do this directly in the new Payroll module and it complained when trying to create the user without any leave entitlements and wouldn't let me proceed.

So, I deleted that record and then went back into Reckon One and added the user as an employee there. It successfully created the employee record with just the basic information. I was then able to jump back into the Payroll module and complete the setup for the other elements.

However, I'm not sure that I have everything setup correctly so will take any recommendations gladly.

Cheers,

Danny.

Rav

Hey @dannyIFPL

Checked in with some folks internally in regard to your query and have a bit of info for you.

I'm not withholding tax

If you want tax to calculate at 0% for this employee, then you can set the employee's voluntary rate to 0% in their profile.

I'm calculating and paying their super based on the invoiced amount from the contract

Super guarantee will calculate on any ordinary earnings setup to accrue super.

I'm not accruing the super as a liability (which seemed to be a discussion point in the other examples of how to set this up).

I can't really advise anything on this one unfortunately, an accountant is probably better placed for insight on this particular point.

dannyIFPL

Thanks @Rav

Appreciate the response. I had already had a play with the settings and had set up similar to what you have above and did a test run to confirm that I'm getting the outcome I expected.

I'll check it all with my accountant to confirm I'm applying the correct treatment.

Regards,

Danny.