Lmcstack
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Re: Paying Super for Contractors
Hi Julie We only have the one subcontractor that falls into this category and they are not registered for GST. But I agree, if they were registered for GST the calculation for super would be on the net amount ie. GST ex. If you check with ATO you will see that they also confirm this. "super is not calculated on the GST invoiced amount. You calculate super on the labour component of the contract. Check out the info under the Ordinary hours heading." Cheers Lynne59Views0likes0CommentsRe: Paying Super for Contractors
Hi Roslyn_Little We do not process through MYOB Payroll at all. Our attempts to process through payroll resulted in an error when updating to ATO STP reporting. The ATO website states that super contributions to contractors are to be reported Via STP2 if the accounting software can support it . As MYOB does not currently have the functionality to treat this corrrectly it is clear that the MYOB accounting software does not support it. We have adopted the following process in regards to paying super for contractors. Enter Subcontractor Invoice as usual into MYOB as a purchase and code to G/L Account subcontractors Update a running spreadsheet for all invoice amounts for the subcontractors applicable to super At the end of each month subtotal the amount of subcontractor payments subject to Super Create a purchase or spend money in MYOB payable to the superannuation company and allocate to a separate expense a/c in G/L Superannuation - Contractors We use a clearing house for our super payments which has a portal. We have set up the subcontractors in the portal and update the super payable for at the end of each month Process payment to super clearing house for the monthly super owed to the subcontractors. Hope that helps.77Views0likes1CommentRe: Paying Super for Contractors
That's interesting.... because as per MYOB Moderator's response above they instructed me "to set your employee's employment basis as "Other- Not Reported" and the income type as "Labour Hire." which I followed and resulted in an error when updated STP reporting each time. The MYOB instructions on their website as to how to pay super for a contractor actually just states to add them as an employee https://www.myob.com/au/support/myob-business/payroll/superannuation it does not actually provide guidance to the employment basis or income time. Good to know that you can set both employment basis and income as Labour Hire and that this actually works. That was precisely the answer that I was after when I first asked the question (above). However, that was not the answer I received from MYOB moderator. AGAIN, it would be really helpful if MYOB were transparent and provided clear guidance so as to avoid us all the confusion. As you said in response above, "Xero does have the option to select "Contractor" so we know it can be done.. We do not care what is behind the IT scene but the wording for bookkeepers and Payroll staff should be straight forward and logical. This is just not logical as Labour Hire is NOT the correct wording. We do not have time to try to figure this stuff out. Please add the option "Contractor" and you(MYOB) can code it as you like in the background. "274Views0likes1CommentRe: Paying Super for Contractors
Hi Carmel, We do not process through MYOB Payroll at all. Our attempts to process through payroll resulted in an error when updating to ATO STP reporting. The ATO website states that super contributions to contractors are to be reported Via STP2 if the accounting software can support it . As MYOB does not currently have the functionality to treat this corrrectly it is clear that the MYOB accounting software does not support it. The contractors we have are paid on the basis of an hourly rate. Whilst they may utilize their own tools and equipment, they do not provide materials. They work exclusively for our business and for all intents and purposes, fit the defination of being deemed an employee. Therefore, in terms of calculating the super applicable it is simply the total of the invoice they provide each week multiplied by the SGL rate for super. In your case it would seem that you need some guidance from your external Accountant and/or ATO which is sounds like you are in the process of getting. Hope that helps and good luck with getting clarification on this. Cheers Lynne347Views1like1CommentRe: Paying Super for Contractors
Hi Karma, No update from MYOB to date. In an answer to your question, we have adopted the following process in regards to paying super for contractors. Enter Subcontractor Invoice as usual into MYOB as a purchase and code to G/L Account subcontractors Update a running spreadsheet for all invoice amounts for the subcontractors applicable to super At the end of each month subtotal the amount of subcontractor payments subject to Super Create a purchase or spend money in MYOB payable to the superannuation company and allocate to a separate expense a/c in G/L Superannuation - Contractors We use a clearing house for our super payments which has a portal. We have set up the subcontractors in the portal and update the super payable for at the end of each month Process payment to super clearing house for the monthly super owed to the subcontractors. Hope that helps. Cheers Lynne276Views1like0CommentsRe: Paying Super for Contractors
Hi Karma, No update from MYOB to date. In an answer to your question, we have adopted the following process in regards to paying super for contractors. Enter Subcontractor Invoice as usual into MYOB as a purchase and code to G/L Account subcontractors Update a running spreadsheet for all invoice amounts for the subcontractors applicable to super At the end of each month subtotal the amount of subcontractor payments subject to Super Create a purchase or spend money in MYOB payable to the superannuation company and allocate to a separate expense a/c in G/L Superannuation - Contractors We use a clearing house for our super payments which has a portal. We have set up the subcontractors in the portal and update the super payable for at the end of each month Process payment to super clearing house for the monthly super owed to the subcontractors. Hope that helps. Cheers Lynne614Views1like3CommentsRe: Paying Super for Contractors
No response to date from MYOB. Radio silence......... Given MYOB does not currently support the functionality to correctly pay contractors through their system, nor does it appear that they are the slightest bit interested in addressing this issue, we are paying the super for our contractor seperately through Accounts Payable as a direct contribution to their super fund.378Views0likes2CommentsRe: Paying Super for Contractors
Hi Princess Thanks for responding. The ATO guidelines are clear "super contributions to contractors are to be reported Via STP2 if the accounting software can support it". The problem is MYOB does not support this. The workaround that MYOB recommend is: 1. set the Income Type to 'Labour Hire' as there is no option for Contractor (found under Payroll Details>Taxes>Income Type on the employee card). As stated previously this is not correct as an independent contractor is NOT Labour Hire. 2. update the employee card Payroll Details>Personal Details>Employment basis to "Other - Not Reported". In which case, the the payment of super to the contractor IS NOT REPORTED to ATO. The only benefit in actually setting it up this way is so that you can record the payment through MYOB together will all other super payments. It is not reported to ATO as super under STP. Let's be clear here, MYOB software DOES NOT CURRENTLY have the capability to correctly report super contributions to contractors Via STP2. Once again we are left to figure out some sort of work around to the MYOB. Instead of MYOB acknowledging this, they attempt to deflect and defer to the ATO and our external Accountants. Just like previous issues raised re. Payroll - All Purpose Allowances, MYOB is still yet to rectify this.415Views2likes5CommentsPaying 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: Set code as Labour Hire; or 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: Set both Income Type and Employment Basis in MYOB as 'Labour Hire" (which is not technically correct);or 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 Lynne2.2KViews0likes25Comments