When hiring contractors in Australia, clients using a Contractor of Record (COR) must comply with specific tax and superannuation (pension) regulations. To determine compliance, contractors must be classified correctly to assess whether Superannuation and Payroll Taxes (PRT) apply.
Given the high likelihood that COR contractors in Australia may fall under these obligations, a tailored tax questionnaire is required before the contract signature. This ensures the accurate determination of tax and superannuation applicability, supporting both regulatory compliance and seamless contract management.
Superannuation is calculated on top of the contractor's pay, including expenses, VAT, and overtime. PRT is calculated on top of the contractor's pay + Superannuation, excluding expenses, VAT, and PRT.
Milestone contractors are not affected by this.
Completing the Questionnaire
Clients will complete the questionnaire during the contract creation process, while CORs will do so during their onboarding.
✅ Step 1 - Initiate the questionnaire
After adding the COR, navigate to the Review & Sign tab and select Complete Questionnaire in the Australian Tax Questionnaire section.
✅ Step 2 - Confirm the length of service
Clients will be asked to confirm if the COR will be engaged for services exceeding 90 days. Engagements under 90 days are typically exempt from state payroll taxes; however, we recommend seeking independent professional advice for specific guidance.
For engagements exceeding 90 days, a survey will be provided to the contractor to determine eligibility or potential exemptions.
✅ Step 3 - Confirm work completion responsibilities
The client will be asked to confirm whether they will be responsible for controlling how the contractor completes their tasks and determining which tasks need to be completed.
By clicking Submit, the questionnaire will be completed, the tax percentage will be established, and the information will then be sent to the COR to gather the relevant details from them.
Invoicing
Once applicable taxes are determined, they will be added as separate rows in the consulting fee invoice.