Contingent Worker Payment
What is a Contingent Worker at the University of Adelaide?
A Contingent Worker at the University of Adelaide refers to an independent contractor who is not an employee for most legal purposes, but who falls within the wider definition of employee for certain taxation and superannuation legislation, and is therefore someone for whom employer obligations such as superannuation and payroll tax apply.
Contingent Worker Payments are facilitated through Payroll (Human Resources) which is an entirely different process to Accounts Payable or Other Payments - Finance.
Contingent Worker Payment Process Overview:
- After your Contractor Engagement Assessment Form determines a possible contingent worker status, HR will request further details from the individual/entity being engaged.
- Once the individual provides the information, HR establishes a Contingent Worker record and notifies the local area when it is ready for payment.
- The local area must fill out the Contingent Worker Payment eForm, ensuring:
- Inclusion of cost centre, fund, GL Department, and Project Code and,
- Attachments of the relevant invoice, Statement by a Supplier Form, and the Consultancy Services Agreement (CSA) or equivalent.
- After submission, the eForm is routed to the pre-determined financial approval delegate based on the university employee completing the form.
- Post approval, the eForm is sent to the Quality and Compliance Team (HR) to apply the necessary superannuation guarantee.
- Once the eForm is checked and approved, payment aligns with the upcoming Payroll cycle.
- Creating a new Contingent Worker payment request
- Financial Approval of Contingent Worker payment
- HR Compliance eligibility assessment and approval of Contingent Worker payment
- Contractor Engagement Assessment Process: Accountability Matrix
- Contractor Engagement Process: Workflow for University Areas
Frequently asked questions
Who is a contingent worker?
Following submission of a Contractor Engagement Assessment form, the University may deem the engagement to be that of a contingent worker.
A contingent worker refers to an independent contractor who is not an employee for most legal purposes, but who falls within the wider definition of employee for certain taxation and superannuation legislation, and therefore for whom employer obligations such as superannuation and payroll tax apply.
Payment for contingent workers is via the Contingent Worker Payment eForm and these payments are facilitated through Payroll (HR). This contrasts with a true independent contractor for whom payment is facilitated through Finance.
According to the Superannuation Guarantee (Administration) Act 1992 there are several clear categories of contractors who fall under the extended employee definition and for whom Superannuation payment is required.
Please note this is not an exhaustive list:
- Sportsperson, artist, or entertainer paid to perform, present, or participate in any music, play, dance, entertainment, sport, display or promotional activity, or similar activity.
- Person paid to provide services to support those who perform, play sport, or promote these activities.
- Person paid to perform services related to the making of a film, tape, disc, television, or radio broadcast.
When will payments be made?
Payments to Contingent Workers and their Superannuation Funds are made fortnightly, aligned with HR Payroll deadlines. Please ensure the Contingent Worker Payment Request eForm is submitted and approved by the Wednesday preceding the next pay cycle.
Can contractors choose their own superannuation fund?
Yes, contractors can choose their own Superannuation fund. If the contractor is deemed to have superannuation applied (Contingent Worker), HR will seek choice of fund details, if not provided, then a stapled fund will be selected.
If no stapled fund is identified, then the University’s default super fund – UniSuper will be selected.
What entitlements might apply to my cost centre?
In addition to the cost for the services provided by the Contractor (Contingent Worker), your cost centre may be liable for Superannuation Guarantee amount and payroll tax (PRT). Superannuation Guarantee amount is paid in conjunction with the invoice whilst PRT is calculated on an annual basis depending on the number of days worked during the financial year.
Given below is the total on-cost breakdown as at Financial Year 2023/2024:
- 11% - Superannuation Guarantee Amount
- 4.95% - South Australia State Revenue Office
For other payroll tax percentages that apply to different states, please refer to Payroll Tax Australia.
Who are the financial delegates?
The financial approval delegates required to approve contingent worker payment requests are staff associated with a cost centre and who hold a formal financial delegation. The financial approval delegate will be identified based on the total contract value associated with the engagement of the Contractor (Contingent Worker) and is pre-selected within the form dependant on the specific employee submitting the form.
I have an existing supplier, can I create a new purchase order?
If you have been advised that the existing supplier is a contingent worker or may have additional obligations or has not been assessed for some time – then no, you must submit a contractor engagement assessment form so that they can be correctly categorised.
Will I be able to see financial commitments on my BI/Cognos reports?
Financial commitments will display where there are open purchase orders in the Finance system. HR commitments will not display for any contingent workers. Actuals for payments made via HR will appear in financial reporting as they currently do.
What if a contractor changes their personal details, bank or superannuation fund details?
The contractor (Contingent Worker) will need to contact the HR Service Centre to have their personal details or payment details updated.
How will contractors receive confirmation of payment?
Contractors (Contingent Workers) will receive a system generated email confirming the processing of payment with advice that they will receive the payment within 2 weeks. This email is also received by the staff member who requested the payment in the first instance.
What details will be required from contractors?
In addition to personal details (name, address, email, phone number), contractors (Contingent Workers) will be required to provide an ABN or Statement by a Supplier Form, choice of fund superannuation details and bank account details. HR will contact the relevant individual if payment is required via HR Payroll.
What if a Contractor does not provide an ABN?
Generally, contractors manage their own tax affairs and obligations. As such, as an employer we do not have to withhold from payments to them unless they do not quote their ABN, or you have a voluntary agreement with them to withhold tax from their payments.
Tax will be withheld at the top tax rate (47%) if no ABN or Statement by a Supplier form are provided.