Hi Community, We have a contractor for which we are required to pay super for. I have set this contractor up as an employee according to the MYOB guidelines. We processed a zero pay and added the Super Guarantee dollar amount. In the first instance when we tried to finalize the pay we received the following error:IncomeStreamTypeCError: A mandatory field has not been completed. (ATO error code CMN.ATO.GEN.XML.04). After a little research on forum, there was guidance around needing to set the Income Type which is found under Payroll Details>Taxes>Income Type on the employee card. It was suggested s that this should be set to the option of "Labour Hire" as there is no option for Contractor. Not technically correct, as this contractor is not through labour hire. Anyway, if someone could confirm that this is the option to select? The other thing we did was to process the contractor payment separately and to update the employee card Payroll Details>Personal Details>Employment basis to "Other - Not Reported". This returned another but different error which was as follows:PaymentBasisCode Error: Employment Basis code is invalid (ATO error code:CMN.ATO.PAYEVNTEMP.000272) Again, looking at the community forum, two different options are suggested:Set code as Labour Hire; orSet code as Other - Not Reported. Option 1 - set as 'labour hire'. again is not technically correct as contractor is not through Labour Hire and Option 2 means that the payment is not reported to ATO. ATO website states that super contributions to contractors are to be reported Via STP2 if the accounting software can support it. From what I can see, we have 2 options:Set both Income Type and Employment Basis in MYOB as 'Labour Hire" (which is not technically correct);orSet Income Type as 'Labour Hire' and Employment Basis as 'Other - Not Reported' (in which case suggests that MYOB software does not support this type of reporting).Would appreciate any assistance with regards to this. Many ThanksLynne

This is a great explanation What MYOB should do, is as you said - own it and be transparent with us to avoid confusion. Xero does have the option to select "Contractor" so we know it can be done.. We do not care what is behind the IT scene but the wording for bookkeepers and Payroll staff should be straight forward and logical. This is just not logical as Labour Hire is NOT the correct wording. We do not have time to try to figure this stuff out. Please add the option "Contractor" and you(MYOB) can code it as you like in the background.

Hi PrincessThanks for responding. The ATO guidelines are clear "super contributions to contractors are to be reported Via STP2 if the accounting software can support it". The problem is MYOB does not support this. The workaround that MYOB recommend is: 1. set the Income Type to 'Labour Hire' as there is no option for Contractor (found under Payroll Details>Taxes>Income Type on the employee card). As stated previously this is not correct as an independent contractor is NOT Labour Hire. 2. update the employee card Payroll Details>Personal Details>Employment basis to "Other - Not Reported". In which case, the the payment of super to the contractor IS NOT REPORTED to ATO. The only benefit in actually setting it up this way is so that you can record the payment through MYOB together will all other super payments. It is not reported to ATO as super under STP. Let's be clear here, MYOB software DOES NOT CURRENTLY have the capability to correctly report super contributions to contractors Via STP2. Once again we are left to figure out some sort of work around to the MYOB. Instead of MYOB acknowledging this, they attempt to deflect and defer to the ATO and our external Accountants. Just like previous issues raised re. Payroll - All Purpose Allowances, MYOB is still yet to rectify this.

We've the same problem here. Consulted the MYOB consultant but no solution was given as apparently non of the options given (Labour hire or Other non reported) can correctly compliant with the ATO requirement for contractor super payment...I hope someone can provide better advise on this.

Hi, Has there been any update from MYOB with regards to the inability of the program to handle contractor super payments? I am in the same boat as you and am experiencing the same issue when attempting to pay super to contractors. Thanks

We are in the same boat! How does this work with being STP compliant?As our subbies are paid for a mix of labour and materials (we had a ruling years ago that they were true subbies but one new contractor is now saying he is entitled to it. I am awaiting a ruling from the ATO but want to cover ourselves just in case.)How do you do your PO/ invoice to reflect the component that is subject to super?Can I just do one Pay run/ or payment for the qtr or do you apply it every pay week? CheersCarmel

Lmcstack

Experienced User

1 year ago

Paying Super for Contractors

Hi Community,

We have a contractor for which we are required to pay super for. I have set this contractor up as an employee according to the MYOB guidelines. We processed a zero pay and added the Super Guarantee dollar amount.

In the first instance when we tried to finalize the pay we received the following error:

IncomeStreamTypeCError: A mandatory field has not been completed. (ATO error code CMN.ATO.GEN.XML.04).

After a little research on forum, there was guidance around needing to set the Income Type which is found under Payroll Details>Taxes>Income Type on the employee card.

It was suggested s that this should be set to the option of "Labour Hire" as there is no option for Contractor. Not technically correct, as this contractor is not through labour hire. Anyway, if someone could confirm that this is the option to select?

The other thing we did was to process the contractor payment separately and to update the employee card Payroll Details>Personal Details>Employment basis to "Other - Not Reported".

This returned another but different error which was as follows:

PaymentBasisCode Error: Employment Basis code is invalid (ATO error code:CMN.ATO.PAYEVNTEMP.000272)

Again, looking at the community forum, two different options are suggested:

Set code as Labour Hire; or
Set code as Other - Not Reported.

Option 1 - set as 'labour hire'. again is not technically correct as contractor is not through Labour Hire and Option 2 means that the payment is not reported to ATO.

ATO website states that super contributions to contractors are to be reported Via STP2 if the accounting software can support it.

From what I can see, we have 2 options:

Set both Income Type and Employment Basis in MYOB as 'Labour Hire" (which is not technically correct);or
Set Income Type as 'Labour Hire' and Employment Basis as 'Other - Not Reported' (in which case suggests that MYOB software does not support this type of reporting).

Would appreciate any assistance with regards to this.

Many Thanks

Lynne

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Paying Super for Contractors

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