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How Super For Contractors Can Work

Posted on May 5, 2021 by admin

Contractors who run their own business and sell their services to others have different obligations to their super than what employees in a business may usually have.

A contractor (also known as an independent contractor, a subcontractor, or a subbie) who is paid wholly or principally for their labour is considered to be an employee for super purposes, and may be entitled to super guarantee contributions under the same rules as other employees.

A contract may be considered ‘wholly or principally for labour’ if:

If hiring a contractor to perform solely their labor for a fee, the employer may also have to pay super contributions on their behalf.

In this sense, if you are a contractor who is being contracted to an outside business than your own to perform your usual work or labour, your employer must contribute to your super the same way they would any other employee.

This could be seen in an example of an electrician who runs their own small business, or is employed by a small business who has been hired by another business to supplement their workforce and perform a specific role that they can fit to.

Say the electrician who runs their own business has been subcontracted by the larger business.

They are performing labour but also providing materials (ie, themselves plus a toolbox plus a van full of powerpoints and wiring etc), they would be seen as a contractor and not an employee for super purposes. They must pay themselves super, in this case.

However if they are sub-contracted to perform labour only then the company that has sub contracted them may be liable to pay super on the amount that they pay to their contractor.  This would be the case where the electrician just turns up with their tool box and everything else is provided by the “employer”.

If they are in an employment-like relationship with the person that they entered their contract into, they may need to have their super paid to them by their contract employer. In order for super to be applied from what you earn, the contract must be directly between you and your employer. It cannot be through another person or through a company, trust or partnership.

It is important that both parties in the process are aware of their super obligations during the contracted period. There can be significant penalties for employers who use contractors if they fail to correctly pay super. Each case regarding contractors and super needs to be assessed independently to ensure that you are doing the right thing. There is no definitive black and white line between a contractor and a contactor in an employment-like relationship that can be obviously seen after all.

If you’re unsure about whether or not you’re meeting your obligations as an employer, or are a contractor looking to make sure their super is being correctly paid into, speak with us.

 

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What Can Engaging A Business Adviser Do For You?

Posted on June 14, 2021 by admin

Feel like your business is stuck in a rut? Unable to solve a problem that you know is going to cost you in the long run?  It might not be financially tanking, and it’s highly likely that your revenue stream isn’t down, but if you’re not sure what direction to take, it could also mean that you need a fresh pair of eyes to take a look at particular issues that your business is facing to deal with them.

Business advisers can be engaged across many fields with specially focused advice or strategies to a specific area (such as accountants, business bankers or commercial lawyers) or be a business adviser who is dedicated to considering the overall goals and long-term ramifications of your business’s strategies.

A business adviser can be hired on either a one-time basis (to deal with one-off problems your business is set to face) or on an ongoing basis to provide continued support.

Suppose you’re only looking for a particular solution to a problem. In that case, one-time advice from a business adviser can be an easy and cost-effective solution to solve that particular problem. However, suppose you’re looking for long-term ongoing support that’s backed by years of experience and a perspective that’s looking to preempt these issues. In that case, ongoing advice may be more appropriate for your needs.

Engaging a business adviser can provide your business with fresh ideas based on an objective analysis of your business’s current performance and situation.

As an example, contracting an accountant in a business adviser role means that you are looking for strategic and financial advice like profitability improvement, tax planning and advice regarding business performance.

An adviser who can offer timely and relevant advice to your financial situation can make a huge difference to your business in the long run.

If you’re looking for assistance in plotting out the financial future of your business, you can come and speak with us. We’re well-equipped to assist you in mapping out your business’s plan for the future, so start a conversation with us today to see how we can help.

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