Happy HR New Year – Employee or Contractor and End of Financial Year 2024

Are you confident you know which team members are really employees? Are you meeting your obligations? Don’t let the Superannuation, PAYG and FBT implications catch you out. 

We spend a lot of time supporting clients to correctly allocate the people they engage as Permanent Employees, Casual Employees, Contactor deemed an Employee or Independent Contractors. For some of our clients, the line can feel a blurry in the beginning. Once you understand the definition, it is clear cut and easy to implement.   

If you are working with independent contractors, it’s important to confirm that the correct documentation is in place, and they don’t meet the definition of an employee by accident.  2022 High Court decisions impacted the definitions and compliance expectations. Those have changed again recently. With pay-as-you-go, superannuation and FBT obligations for employers changing regularly there are more reasons to be aware and be across the details.  

Pay As You Go Implications

– Single Touch Payroll means reporting requirements can cause issues if you miss allocate an employee as a contractor. Backpay and potentially penalties can be expensive cause headaches to correct the error. 

Superannuation

– Superannuation is increasing to 11.5% from July 1, 2024. A contractor deemed an employee is entitled to Superannuation from their employer and should not be invoicing you for it. Have you factored in the additional .5% for those who meet the criteria?  

FBT

– Laws changed in 2023 and if you provide car parking as a benefit for employees you would be paying more. Your independent contractors who receive car parking from your business might also be included in your FBT reporting requirements now. You may not be able to deduct the expense until the FBT is paid. 

Payroll Tax

– State Governments are using these new ruling to reassess how much payroll tax is required to be paid. We’ve had employers caught out by the inclusion of Contractors deemed Employees, who needed to recalculate payroll tax and make significant additional payments.   

If you need help to correctly identify whether you have employees, contractors deemed employees or contractors making up your team, reach out to us. We are here to help. Call +1 300 474 672 or email info@impacthr.com.au