Paying Super for Contractors

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