contractors

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  • Question
  • Updated 10 months ago
  • Answered
Hi, I am using Reckon Accounts Premier 2017, payroll updated to 2018. Do I enter a contractor through payroll ?
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Kerrie Clark

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Posted 10 months ago

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Kevin Russell, Accredited Partner

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Yes. of course you will have some fun if you are paying GST. Write to me, kevin@zappy.com.au and I will tell you how I deal with it. One of my clients has 55 contractors. I pay payroll taxes, workcover (for the ones which aren't companies) and superannuation. Thanks for your question. 
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Robert Smeallie

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Hi Kevin

Are you sure about contractors getting superannuation payments? As far as I know only full time, part time and casual employees get paid superannuation and that is only when they reach the superannuation threshold amount of income. They provide a service and are paid as a provider and they look after their own superannuation and holiday pay which are built in to the rate they charge per hour.

Robert Smeallie
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Kevin Russell, Accredited Partner

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Rob well if they arent companies its probably a gray area. We have always paid it. I dont think we are going to change either. Thanks for your question.
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Sladjana MD

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Hi Kerrie, 

I believe that your question should be examined in detail by your client's tax accountant. From the tax treatment and analysis based on Contractor's payment, specific job duties/industry, GST, workcover, superannuation, TPAR it'll depend how you record this in Reckon. You need to examine the law first before you record it in the bookkeeping software. It's not working the other way around. In case that your contractor's payment is subject to all off the above I'd agree with Kevin's post treatment. In case that the above doesn't apply then it's a subcontractor's payment expense DR (with or without GST), CR Bank and also with ticked on box for TPAR on supplier's card. 
Good luck!

Regards, 
Sladjana
Accountant 

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Robert Smeallie

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Kevin

In Australia if they are a contractor then they have to have an Australian Business Number (ABN) in order to carry out their business. If they are employees who are being regarded as contract hire and not self-employed Contractors then they would be a different situation and they would then be entitled to superannuation but they would be called casuals rather than contractors.

Robert Smeallie.
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Kevin Russell, Accredited Partner

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Rob I dont disagree with anything you have said.