Forum Discussion

Lmcstack's avatar
Lmcstack
Experienced User
2 days 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:

  1. Set code as Labour Hire; or
  2. 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:

  1. Set both Income Type and Employment Basis in MYOB as 'Labour Hire" (which is not technically correct);or
  2. 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 

  • Princess_R's avatar
    Princess_R
    MYOB Moderator
    2 days ago

    Hi Lmcstack,

     

    Setting up a contractor as an employee in MYOB for superannuation purposes can be tricky due to the specific requirements of the Australian Taxation Office (ATO). As you mentioned, the errors (CMN.ATO.GEN.XML.04 and CMN.ATO.PAYEVNTEMP.000272) can be resolved by setting your employee's employment basis as "Other- Not Reported" and the income type as "Labour Hire." For more details about employment basis, check out this link. I also recommend reaching out to your accountant or the ATO for specific guidance in accurate reporting of tax obligations.

     

    Cheers,

    Princess