Holly Salmons Holly Salmons

How do you pay your contractors super?

If these guys are contractors, they may or may not need to be paid super!

In the sometimes fast and furious world of media production, financial responsibilities often take a backseat to the creativity. However, neglecting superannuation obligations can lead to pitfalls that are easily avoidable. Let's dive into two major mistakes many creative business owners inadvertently make and how to navigate these challenges effectively.

1.Is my contractor a contractor or an employee?

The Mistake: Neglecting to pay super to contractors.

In the creative world, engaging contractors is a common practice. However, assuming that contractors are exempt from superannuation contributions can lead to legal and financial complications. The Australian Taxation Office (ATO) provides an Employee/Contractor Decision Tool that can be invaluable in determining the correct classification. Taking the time to consult this tool ensures compliance with superannuation regulations.

2. How do I pay contractor super?

The Mistake: Paying super directly to a contractor when it should be paid directly to a Superannuation Clearing House.

Creative business owners should proactively request all super details on invoices. This includes the Super Fund name, ABN, Unique Superannuation Identifier (USI), member number, address, Tax File Number (TFN), and Date of Birth (DOB). If all these details are on the invoice when you pay it, you can easily refer to it later when you go to pay their super. There are a few ways to pay super, but I think the easiest ways are either via the ATO Small Business Clearing House or via Xero payroll (super only).

How to navigate smoothly so you pay your super on time

  • Consult the ATO Tool: Before engaging contractors, utilise the ATO Employee/Contractor Decision Tool. It provides clarity on who, what and why contractors should get paid.

  • Avoid the last minute scramble: Request comprehensive invoice details from your contractors from the outset : This includes the Super Fund, ABN, USI, member number, address, TFN, and DOB.

  • Set up your system in advance: Streamline the process of paying super by adding your contractors details to Xero payroll or the ATO SBCH as soon as you receive.

  • Pay your super 10 days before the due date to ensure it is received in time. Late payments incur the Super Gaurantee Charge which is penalty interest on late payments.

By addressing these two common mistakes head-on, creative business owners can ensure a seamless and compliant approach to superannuation. Navigating the intricacies of financial responsibilities not only fosters a healthy working relationship with contractors but also contributes to the long-term success of creative ventures.

If you need help sorting out your super, give me a shout.

Thanks for reading,

Holly

Author Holly Salmons is the founder of Neo Numerist. She holds a Master of Business (Bus. Law), University of Sydney and a Graduate Diploma in Producing & Screen Business, AFTRS.

Neo Numerist helps creatives make smarter accounting choices.

Founded and headed by me, Holly Salmons (M Bus.Law, Grad. Dip Screen) Neo Numerist provides cost-effective accounting to digital media creators and small businesses in the creative industries.

We specialise in accounting for film, television, and video production, along with other creative and digital industries.

We provide film and TV accounting services Austrlia wide, (with a focus on Melbourne and Brisbane) including pre pre-production finance consulting and last-minute cost reports. We can look after your bookkeeping and payroll for any production within Australia, and handle your BAS, budget and finance reviews, cashflow forecasting, and accounts payable. We even help launch start-ups and side hustles with the business essentials they need to start trading.

We can help you create a project budget and stick to it, identify cost-saving opportunities within your current projects, ensure you’re complying with regulations, facilitate positive relationships with investors and creditors, and offer valuable insights for informed decision-making.

We offer a range of Monthly Packages, from our Sole trader Starter Package to us working with you as part time Finance Manager or CFO. Alternatively, select your own suite of services to suit your needs.

Got questions? We’ve got answers.

Say HELLO today

We offer free consultations, so please contact us to book.

holly@neonumerist.com.au
+61 404 251 350

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