Contractors and Payday Super
This is what I did. 1 - Create or Update the Contractor’s Employee Card 2 - Set the Personal Details>Employment Basis to Other (Not Reported). This means you won't be reporting the contractor's sup...
Forum Discussion
Hi SuFish,
Totally get why you’re checking how this will work with the new ATO rules. If contractor super keeps going through payroll, it'll still sit inside the STP. The alternative is to run them via invoices (contractor bills/expenses) and pay their super manually or direct to the super fund, instead of through Pay Super. The error CMN.ATO.PAYEVNTEMP.000272 is coming from how the employment basis is mapped for STP. For contractors that are being reported, you’ll want to change their Employment basis to Labour hire, which is the option that maps to the ATO’s non-employee code and lets their super report cleanly without that error.
Cheers,
Doreen
Thanks for jumping in Doreen.
So are you saying we can't continue to pay contractor's invoices through Accounts Payable and their Super through payroll?
Or are you saying you can continue to pay contractor's invoices through AP and Super through payroll but you have to use Labour Hire for their Employment Basis? If I do this the reporting continues through STP but there is no need to report QE.
Appreciate your thoughts.
Su
Hi SuFish,
You’ve got it! You can definitely keep paying your contractors’ invoices through Accounts Payable. Since contractors shouldn’t be reported via STP, set them up as an “employee” with an employment basis of “Other (Not Reported)”. This keeps them out of STP while still letting you pay their super through Pay Super.
From there, create a separate $0 pay run that only includes their super contribution, then pay and authorise the super via Pay Super. Here’s a link you can check out for more details on paying super for contractors. However, it’s always worth checking in with your accountant or the ATO so you’re sure everything’s set up just right for your contractor arrangements.
Cheers,
Princess
Hello Princess, Thanks for the reply. What I've found is when I use “Other (Not Reported)” that the STP report is then Rejected. Isn't that an issue?
If I use Labour Hire on both "Employment Basis' and 'Income Type' it goes through STP ok. But does that mean I still have to report QE after July 1?
Any other insights appreciated...Su
