Subcontractors & Taxable Payments
Just wondering if anyone has any recommendations that will work for my client. The client is using AR 2019 with Payroll. They have 1 subcontractor only and currently no employees. Subcontractor has been with them for probably 10 years +. Subcontractor gives her a Tax Invoice (GST Registered) each month. From the invoice my client wants to accrue SGC and contractor wants to sacrifice part to Super. As far as I can see, subbie is really an employee but I''ve had a real tussle with subbie's accountant who absolutely insists he must to paid as a subbie. So, having said that I setup a procedure to help the bookkeeper record the subbie's payment via Spend Money. This worked fine for the bookkeeper, however Taxable Payments report does not balance with the General Ledger account and is out of balance by exactly the Super Sacrifice. Has anyone got any other data entry ideas? A new bookkeeper is coming on board next week and I'd like to implement a new procedure which is alot easier than this. The attachment shows the SPEND MONEY screen, but please ignore the Memo where I've type 9.25%. This spreadsheet was created awhile back and since I've had the bookkeeper change SGC to 9.5%. I'd greatly appreciate any other ideas.
Agree with Graeme on this.
Salary sacrifice is for employees. For the subbie on the TPR you will be recording $1,100 paid to him of which $100 is GST.
The subbie will record the super paid by him, $300, as either a deduction against his income earnt or as additional after tax contribution. He will also need to advise his super fund if he is claiming as a business deduction or not.
I would really be getting out of this side of it and paying him the whole $1,100 and tell him to set up his own auto payment on his bank site for the $300, and just paying the SG that is due.
Half the time these subbies want all the perks of being an employee and the business owner doing all their leg work but they also want the benefits of being a subbie. They can't have it every which way and they are not children, even though they act like it.
