Posted on May 2023 By Speller International
We discussed in our earlier blog - the pros and cons of contracting, that you can expect a higher daily rate as a contactor. So how can you be paid?
The second blog in our series of the Contracting vs Perm debate, we take a sidestep and look at the different options for those who work contract roles.
There are 3 ways you can set yourself up as a contractor here is Australia. Here at Speller we see all 3 ways on a daily basis.
Questions you have to ask yourself are;
How much time can I give to payroll administration
How much control do I want over my administration
What suits my current situation
How to legally engage with your client (employer) as a contractor is the biggest question you’ll face and one you need to consider carefully. We strongly advise you seek professional advice from your accountant when facing this question. For now, here are some key points to consider:
Contract as a Speller PAYG Contractor
This is arguably the simplest way to contract as we (Speller International) handle the majority of your administration, removing any hassle and time spent on administration for you:
As a Speller International PAYG Contractor we will:
Process your pay, weekly, 3 weeks in arrears
Email your pay advice
Lodge your PAYG tax to the ATO weekly
Make monthly superannuation contributions to your nominated fund
Coordinate salary sacrificing of superannuation
Supply you WorkCover
Administer $10m of Professional Indemnity and $20m of Public Liability Insurance
Cover state Labour Hire Licenses
Contract as a Pty Ltd Company
When you operate as a Pty Ltd company, you assume the most flexibility and control of running your own business as well as the burden of managing its affairs. The biggest difference lies in the opportunities you may get to offset expenses and minimising tax.
Here’s a shortlist of things you’ll need to address:
Work with your accountant to set up the company
Register for GST
Procure and administer Workcover
Acquire $10m of Professional Indemnity and $20m of Public Liability insurances
Administer your own Superannuation
Complete BAS/IAS statements as required
Prepare statutory accounts and pay for associated costs
May need to provide Labour Hire Licences for some states
Note: this is not a complete list and you must seek advice from your accountant.
Contract through a Contractor Management Company
Contracting through a Contractor Management Company provides the same financial benefits of Pty Ltd contracting, without all the associated risks and time spent administering a company. For a nominal fee a Contractor Management Company will:
Provide you with a company tax structure to work under
Act as your own tax expert
Take care of all administration and back office support on your behalf
Maximise your tax position
Cover you for Workers Compensation, Public Liability and Professional Indemnity insurances
Note: different contractor management companies can offer different services so it’s a good idea to research and compare before you commit.
No one way is better than the other. As mentioned above, speak to an accountant before you take the leap into contracting and speak to our team to find out what opportunities we currently have for contract roles. Remember to stay tuned in the next few weeks for a look at the Pros and Cons of Permanent roles blog.