Contactor.........entitled to super??
Thread Starter
Contactor.........entitled to super??
Is someone employed by a company on a full time basis, but paid as a contractor entitled to to be paid superanuation.
Is being paid as a contractor legal, when 100% of your work is for that company and you are effectively an emplyee.
Is being paid as a contractor legal, when 100% of your work is for that company and you are effectively an emplyee.
Join Date: Oct 2002
Location: Australia
Posts: 168
Likes: 0
Received 0 Likes
on
0 Posts
Mate, get advice on this NOW, if more than a certain % of your income comes from one source, you are legally an employee and are entitled to super, sick days, holidays etc.
Join Date: Feb 2000
Location: Third Barstool on the left
Posts: 449
Likes: 0
Received 0 Likes
on
0 Posts
I would add to the PM's comment and suggest that it is compulsory for everyone to pay 9% of their income into an appoved superannuation scheme. The trick in making you a "contractor" is that the liability for all the on-costs such as super, tax, worker's comp are shifted from your "employer" (for want of a better term) on to you.
Generally speaking they will try and smoke you with "we'll just pay you as a contractor then you don't have to worry about paying tax or anything cos we won't have to give you a group certificate"
"Yeah but I'll have to declare it as income"
"No... well.. yeah.. but..."
Generally speaking they will try and smoke you with "we'll just pay you as a contractor then you don't have to worry about paying tax or anything cos we won't have to give you a group certificate"
"Yeah but I'll have to declare it as income"
"No... well.. yeah.. but..."
If you earn the bulk of your income from the one source, it does not matter whether you are a contractor or a wages employee, the super contribution for the worker has to be paid, plus annual leave, sick leave etc. And I endorse the comment to think about your personal liability too.
Join Date: Oct 2006
Location: Sydney
Posts: 131
Likes: 0
Received 0 Likes
on
0 Posts
The employer can't be held liable for your super and other benefits just because you get all your income from one source (him). That's your doing, not his.
There are tests to determine whether, from the employer's side, he can be expected to treat you as an employee. For example:
- Do you (the contractor) provide your own tools (as would a plumber, for example)?
- Does he (the employer) require you to show up at particular times and places, or does he allow you to get your work done as it suits you?
And so on. Do get advice -- you may be entitled to something -- but just because you're a contractor with only one customer doesn't mean you're an employee.
There are tests to determine whether, from the employer's side, he can be expected to treat you as an employee. For example:
- Do you (the contractor) provide your own tools (as would a plumber, for example)?
- Does he (the employer) require you to show up at particular times and places, or does he allow you to get your work done as it suits you?
And so on. Do get advice -- you may be entitled to something -- but just because you're a contractor with only one customer doesn't mean you're an employee.
Join Date: Jun 2004
Location: Australia
Posts: 63
Likes: 0
Received 0 Likes
on
0 Posts
I had the same questions when I started contracting. I found this on the ATO website and I think quite a few companies would be up for hefty bill if people pushed this law, but the contractor also might find their contract may dry up pretty quickly. I know a couple of guys that are waiting until they walk out the door to hand in the bill for a few years missed super.
http://www.ato.gov.au/super/content.....htm&page=6&H6
As for insurance I have heard that you can take out a policy for personal idemnity with QBE Aviation / AUP. But I would think that the insurance policy on the aircraft would cover you. Maybe ask if the policy is specifc to the company you are working for or if the C of R holder has just got a policy that cover pliots up to a certain experiance level.
Hope this helps you out
http://www.ato.gov.au/super/content.....htm&page=6&H6
As for insurance I have heard that you can take out a policy for personal idemnity with QBE Aviation / AUP. But I would think that the insurance policy on the aircraft would cover you. Maybe ask if the policy is specifc to the company you are working for or if the C of R holder has just got a policy that cover pliots up to a certain experiance level.
Hope this helps you out
Join Date: Apr 2001
Location: Melbourne
Posts: 280
Likes: 0
Received 0 Likes
on
0 Posts
It is important to have a WRITTEN CONTRACT SIGNED BY BOTH PARTIES that will spell out who pays what including Superannuation, Workers Comp, Insurance for Aircraft and Public Liability.
DONT work for someone that offers to put you on as a contractor "To do a few hours" and then they only pay you the Casual flying rate, expecting you to cover Super, Workers Comp etc. And above a threshold (It was $50k) you are required to be registerd for and GST.
Your contract rate will need to be AT LEAST 1.6 times the award rate to allow you to cover your LEGAL OBLIGATIONS as an employer of amoungst other things.
- Workers Comp & other insurances
- Superannuation (9% of your base wage)
- Holidays - Annual Leave
- Sick pay
- Accountant for taxation advice
I think that there is some confusion in some posts here with regard to what is required to be paid or covered as part of the industrial relations requirements and what is required for taxation purposes. If you work >80% of the time for one person you may be considered as an employee for taxation purposes. This means that in most cases you cant claim a certain amount of benefits that others can and if you are operating as a company, company tax doesn't apply.
I operate a company (non aviation) that obtains about 98% of income from one source. The company passes the ATO means test and is therefore not considered personal service. I still have to provide all my own insurances, tax etc. I would think that the case of a pilot working for one operator would be considered as personal income.
for taxation refer to http://www.ato.gov.au/content/downloads/nat4788.pdf
The IR laws regarding if you are an employee or not are covered here.
For IR take a look here (Mar 2007 new laws)
http://www.workplace.gov.au/workplac...t+contractors/
And more to look at
http://www.workplace.gov.au/NR/rdonl...state_laws.pdf
http://www.workplace.gov.au/NR/rdonl...rangements.pdf
http://www.workplace.gov.au/NR/rdonl..._contracts.pdf
DONT work for someone that offers to put you on as a contractor "To do a few hours" and then they only pay you the Casual flying rate, expecting you to cover Super, Workers Comp etc. And above a threshold (It was $50k) you are required to be registerd for and GST.
Your contract rate will need to be AT LEAST 1.6 times the award rate to allow you to cover your LEGAL OBLIGATIONS as an employer of amoungst other things.
- Workers Comp & other insurances
- Superannuation (9% of your base wage)
- Holidays - Annual Leave
- Sick pay
- Accountant for taxation advice
I think that there is some confusion in some posts here with regard to what is required to be paid or covered as part of the industrial relations requirements and what is required for taxation purposes. If you work >80% of the time for one person you may be considered as an employee for taxation purposes. This means that in most cases you cant claim a certain amount of benefits that others can and if you are operating as a company, company tax doesn't apply.
I operate a company (non aviation) that obtains about 98% of income from one source. The company passes the ATO means test and is therefore not considered personal service. I still have to provide all my own insurances, tax etc. I would think that the case of a pilot working for one operator would be considered as personal income.
for taxation refer to http://www.ato.gov.au/content/downloads/nat4788.pdf
The IR laws regarding if you are an employee or not are covered here.
For IR take a look here (Mar 2007 new laws)
http://www.workplace.gov.au/workplac...t+contractors/
And more to look at
http://www.workplace.gov.au/NR/rdonl...state_laws.pdf
http://www.workplace.gov.au/NR/rdonl...rangements.pdf
http://www.workplace.gov.au/NR/rdonl..._contracts.pdf
