Corporate Contractor Engagement Solutions.
The Business risk.
Using a contingent workforce (contractors) gives you the flexibility and specialist skills you need to run your business. However, it can come with downsides:
- The admin cost to process timesheets, invoices and expenses
- The risk that contractors are not properly set up for their tax and insurances.
- The risk that the contractor fails the ATO’s PSI rules and is deemed an employee costing you even more money.
- The regulatory requirements and compliance burden for companies
The recent ATO and Fairwork changes in regard to contractors have placed hiring companies under the microscope. There are significant risks to your organisation if your contractors do not comply with the Personal Services Tax legislation (PSI).
Can you answer these questions?
- Could this contract arrangement be considered a Sham Contract under the Fair Work Australia Act?
- Does the contract with the individual reflect the common law characteristics of an Independent Contractor?
- Is the arrangement fair to both parties (Independent Contractors Act)?
- Is the arrangement compliant from a taxation perspective (Personal Services Income (PSI) provisions of the Income Tax Assessment Act
Many organisations believe that if their Contractor invoices them through a company, trust structure or with an ABN they are safe. If you enter into a contracting arrangement without the full knowledge or understanding of the factors that impact upon the engagement your company is at risk.
Non-compliant Companies are running the risk that they may be liable for non-reporting and non-payment of pay-as-you-go (PAYG) taxation and superannuation guarantee payments, payroll tax and penalties for not withholding tax. This could lead to prosecution and possible fines, we can help you navigate the complexities and take care of all statutory obligations and insurance requirements; keeping your organisation compliant.
The solution is to engage a specialist in this critical area to structure your arrangements with independent contractors in a compliant and legal manner. Power Pays can ensure you are compliant and remove any risk to your organisation. We reduce costs and increase operational efficiency through our industry leading software that makes it easier for you and your contractors to lodge and approve timesheets online, rather than through an outdated paper-based system.