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 t...
Forum Discussion
Hi traci_vbt,
Thanks for raising this. I can completely understand why this feels confusing. The main thing to separate here is the contractor’s legal/tax treatment versus the label used in the MYOB field. If a contractor is one you’re required to pay super for, MYOB’s current help article says to set them up as an employee for super purposes, set Employment basis to Other (not reported), and set Income type to Labour hire. So yes, I’d agree the term Labour hire can be easy to misread. In this setup, it isn’t saying the person necessarily came from a labour hire agency in the everyday sense. It’s the available MYOB/ATO reporting label used in the product for this contractor-super scenario.
The current MYOB guidance is:
- set the contractor up as an employee as well as a supplier if needed
- set Employment basis to Other (not reported)
- set Income type to Labour hire and TFN to 000 000 000
- create an unscheduled pay with only the super amount and all other values at $0
- then pay it through Pay Super within 7 days of paying the contractor’s invoice
On the broader obligation side, MYOB’s public guidance also notes that some contractors are treated as employees for super purposes under ATO rules, such as where they’re paid mainly for their labour. So a person can still be a contractor generally, but be treated differently for super. Because that part depends on the working arrangement, we’d still recommend confirming the obligation itself with the ATO or a payroll adviser. But once super does apply, the setup above is the current MYOB-supported process.
Regards,
Sai
Hi Sai,
Thank you for your clear explanation.
It has recently been confirmed that my subcontractor is an employee only for superannuation purposes.
Since I am new to this process, I still need clarification on the next step. After entering my subcontractors' details as per the instructions above, how do I confirm the ATO has received the payment notification? There seems to be some uncertainty around this process as well. I do not understand enough about it yet, so I am not even 100% sure what I am asking about; I'm just referencing comments I have read in the MYOB community while researching what I need to do. Is this step included in the payment process hosted by MYOB, or must I take another step?
I look forward to hearing from you again soon.
Regards,
Traci
Hi traci_vbt,
Thanks for your message. Yes, if you’ve already followed those setup steps, the next part is done within MYOB’s Pay Super process. Once you record and authorise the super payment batch in Payroll > Super payments, MYOB sends the contribution to the contractor’s super fund via Pay Super. In terms of confirmation, you can check the payment status in MYOB. Once the batch reaches Completed, it means the payment has been successfully sent to the super fund. So there’s generally no separate step needed to notify the ATO for a contractor set up as Employment basis = Other (not reported), as those payments aren’t reported to the ATO through STP.
If you haven’t gone through the full process yet, please make sure to follow the steps here: Paying super for contractors. This includes setting the contractor up as an employee, recording a super-only pay run, then submitting the payment through Pay Super within 7 days of paying the contractor’s invoice.
If you’ve already done all of that and something still doesn’t look right, please reach out to our live chat support through our virtual assistant, MOCA, or submit a case via My Account and we’ll be happy to take a closer look.
Regards,
Sai
Oh gosh, this is doing my head in. Step 3: Set the Employment basis to Other (not reported). This means you won't be reporting the contractor's super payments to the ATO, which complies with the ATO's rules for Single Touch Payroll reporting. Do I want/need this? Would it be better to set a contractor basis to Labour Hire?
I am getting conflicting information, and I can't understand a word of that complicated reporting link...
Also, I need to back-pay to December 2025. Do I do one lump sum, or 12% on each individual past invoice?
