If you pay independent contractors for their labour, you may need to also pay super for them. To do this, set up the contractor as an employee and pay their super straight from MYOB Business – just like a regular employee.
If you already have the contractor set up as a supplier in MYOB, it's OK to also set them up as an employee.
If you're not sure if someone is an employee or contractor, check the ATO guidelines.
This is general information only
If unsure, check your super obligations with the ATO and your payroll advisor.
Decide if you need to pay super
Under the ATO's rules, some contractors are treated as employees for super purposes (for example, they're paid mainly for their labour, not free to delegate work and they're regularly engaged).
To confirm if you need to pay super for a contractor:
speak to the ATO or your payroll advisor
If you are required to pay super for a contractor, ask them for their super fund and membership details. Some contractors provide this on their invoices – so maybe suggest they do this for you. If their super fund hasn’t been set up in MYOB, you can add it.
Set up a contractor as an employee
For eligible contractors, set them up as an employee in MYOB so you can include them in pay runs and super payments.
Check your self-onboarding setting
Before you start, check your payroll settings to make sure Employee onboarding is set to Optional, ask me every time (go to Settings ⚙️ > Payroll settings > General payroll information > Employee onboarding). This lets you manually enter the contractor's details into a new employee record.
If needed, you can change this setting back after you've created the contractor's employee record.
Create the employee record
Go to the Create menu > Employee.
Enter the contractor's name and contact info.
Set the Employment basis to Other (not reported). This means you won't be reporting the contractor's super payments to the ATO, which complies with the ATO's rules for Single Touch Payroll reporting.
Leave the Employment category set to Permanent.
Click Set up employee manually. If you don't see this button, check the self-onboarding setting mentioned above.
Click the Payroll details tab > Superannuation tab.
Choose the contractor's super fund and enter their membership number. Need to add their super fund?
Click the Taxes tab.
For the Tax file number, enter 000 000 000.
For the Income type, choose Labour hire.
This information is required to avoid MYOB Business prompting you with a message about missing information every time you pay the contractor's super in a pay run.
Click Save.
When prompted to Request employee details, click Save without sending.
Calculate and record the contractor's super
This is a common approach for calculating the super amount you need to pay. For clarification, check the ATO rules.
Take the labour component of the contractor's invoice (minus GST).
Apply the current super guarantee rate (12%) to that amount.
Use that number as the super contribution in the pay run.
To record the super payment, create an unscheduled pay. This is like a regular pay but with zero amounts – so you can manually enter the super contribution.
Go to the Create menu > Pay run.
For the Pay cycle, choose Unscheduled.
For the pay dates, enter the same date you paid the contractor’s invoice, then click Next.
Select the contractor and expand their pay details.
Enter the super amount against the Superannuation Guarantee pay item. If you're only paying their super, make sure all other amounts in the pay are $0.
Record the pay run. Need a refresher?
Pay the contractor's super via Pay Super
Within 7 days of paying the contractor’s invoice:
Go to Payroll > Super payments.
Select the super contributions for the relevant period (including the contractor).
Click Record.
Authorise and submit the batch via Pay Super.
Pay Super then sends the contributions to the contractor’s fund. More about super payments.
If you pay independent contractors for their labour, you may need to also pay super for them. To do this, set up the contractor as an employee and pay their super straight from AccountRight – just like a regular employee.
If you already have the contractor set up as a supplier in AccountRight, it's OK to also set them up as an employee.
If you're not sure if someone is an employee or contractor, check the ATO guidelines.
This is general information only
If unsure, check your super obligations with the ATO and your payroll advisor.
Decide if you need to pay super
Under the ATO's rules, some contractors are treated as employees for super purposes (for example, they're paid mainly for their labour, not free to delegate work and they're regularly engaged).
To confirm if you need to pay super for a contractor:
speak to the ATO or your payroll advisor
If you are required to pay super for a contractor, ask them for their super fund and membership details. Some contractors provide this on their invoices – so maybe suggest they do this for you. If their super fund hasn’t been set up in AccountRight, you can add it.
Set up a contractor as an employee
For eligible contractors, set them up as an employee in AccountRight so you can include them in pay runs and super payments.
Check your self-onboarding setting
Before you start, check your payroll settings to make sure your employee self-onboarding preference is set to Optional, ask me every time (go to the Setup menu > General Payroll Information). This lets you manually enter the contractor's details into a new employee record.
If needed, you can change this setting back after you've created the contractor's employee card.
Create the employee card
Go to the Card File command centre > Cards List.
Click the Employee tab.
Click New.
Enter the contractor's name and contact info.
Set the Employment Basis to Other (Not Reported). This means you won't be reporting the contractor's super payments to the ATO, which complies with the ATO's rules for Single Touch Payroll reporting.
Leave the Employment Category set to Permanent.
Click Enter details manually. If you don't see this option, check the self-onboarding setting mentioned above.
Click the Payroll Details tab > Superannuation tab.
Choose the contractor's super fund and enter their membership number. Need to add their super fund?
Click the Taxes tab.
For the Tax File Number, enter 000 000 000.
For the Income Type, choose Labour hire.
This information is required to avoid AcccountRight prompting you with a message about missing information every time you pay the contractor's super in a pay run.
Click OK to save.
When prompted to Review employee details, click Close.
Calculate and record the contractor's super
This is a common approach for calculating the super amount you need to pay. For clarification, check the ATO rules.
Take the labour component of the contractor's invoice (minus GST).
Apply the current super guarantee rate (12%) to that amount.
Use that number as the super contribution in the pay run.
You'll now record the contractor's super payment in a pay run using the Bonus/Commission pay type. This simply creates a pay with zero amounts so you can manually enter the super contribution.
Go to the Payroll command centre > Process Payroll.
For the Process all employees paid dropdown, choose Bonus/Commission and dismiss the info box that appears about tax.
For the pay dates, enter the same date you paid the contractor’s invoice, then click Next.
Select the contractor and click the blue zoom arrow to open their pay details.
Enter the super amount against the Superannuation Guarantee payroll category. If you're only paying their super, make sure all other amounts in the pay are $0.
Record the pay run. Need a refresher?
Pay the contractor's super via Pay Super
Within 7 days of paying the contractor’s invoice:
Go to the Payroll command centre > Pay Superannuation.
Select the super contributions for the relevant period (including the contractor).
Click Record.
Authorise and submit the batch via Pay Super.
Pay Super then sends the contributions to the contractor’s fund. More about super payments.