It is essential to obtain a Contractor Assessment to determine if its appropriate to engage a contractor.
Recent remediation of high-risk contractors has resulted in new work flow practices to better support the University legislative compliance adherence.
Directive by the Chief Operating Officer effective March 2021 stated high risk engagement types that can no longer occur as a contractor payment include engagements for teaching and related duties, former staff, existing staff, retired staff holding honorary titles, and certain honorarium payments.
For more information on these engagements please visit the FAQs below.
Frequently Asked Questions
Who is a Contractor?
For the purposes of this Contractor Management process, a Contractor is anyone engaged by the University in an activity which involves a labour component performed in Australia, or performed by Australian residents overseas and will invoice for work done for payment via Finance - Accounts Payable.
- Includes: Consultants
- Excludes: Labour hire agencies and contracts for materials only
- Excludes: Larger organisations with multiple employees who would cover the statutory obligations for those employees.
The difference between an employee & contractor style of engagement can be found via the ATO
Who is a contingent worker?
Following submission of a Contractor 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 worker 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 Human Resources contingent worker payment form. This is in contrast to a true independent contractor for whom payment is via Finance.
When do I need to complete the contractor assessment form?
If you are engaging an individual for labour that isn’t an employee (via employment contract) then you will need to complete the online assessment form. Based on the outcome of the assessment form, the request will flow through to the necessary team for evaluation.
What do I need to do?
Information about the contractor must be obtained by the local area PRIOR to the engagement.
Please follow the steps under Contractor Engagement to obtain an assessment to determine the appropriate payment pathway.
Conflict of Interest - where there is an actual, potential or perceived conflict of interest, a Disclosure of a Conflict of Interest Form must be completed. Refer to the Conflict of Interest procedure or further information.
Do I have to complete a contractor assessment form every time I use the same contractor?
No, not if the nature of the engagement (the labour component of the work being performed) is the same as a previous assessment outcome.
If the contractor/contingent worker hasn’t performed work within 12 months, a new contractor assessment form needs to be submitted.
Once the contractor has been assessed he/she will either be deemed:
- a Contractor (with payment via Finance - Accounts Payable) or
- a Contingent Worker (with payment via Contingent Worker Payment Form) or
- an employee (via an employment contract, contact the HR Service Centre or your HR Advisor, for further advice)
How do I know if a contractor/contingent worker has already been assessed? (Employer Obligations Apply)
Create an HR eform to request a Contingent Worker Payment Form.
Enter the person’s last name or ABN and click Search.
If the person appears, they are a contingent worker and you can proceed with payment.
How do I know if a contractor has already been assessed? (No Employer Obligations Apply)
Please contact Finance on ext 33414, to confirm if the contractor has been previously assessed and is an active supplier. If yes, then normal Finance and Procurement processes apply and no online contractor assessment is required.
Can I engage someone as an independent contractor to conduct and teaching-related duties?
Can staff and titleholders also be Contractors?
Current University staff in any capacity, including continuing, fixed term, part time or full time, casual and sessional appointments cannot be engaged as an independent contractor at the same time. Conversely, a staff appointment should not be offered to a person during the period of a contracting agreement with the University.
Refer to the Recruitment Procedure for further information.
Exceptional circumstances for a concurrent arrangement will be referred to the Executive Director, HR Services, if deemed acceptable as a result of the contractor management assessment findings where both the following requirements are met:
- The service provided differs from the work currently undertaken through employment; and
- A specific distinction between work tasks and hours can be clearly identified and captured
Titleholders supporting the delivery of courses cannot be engaged as contractors.
Former staff may be engaged as contractors if both the following requirements are met and deemed acceptable as a result of the contractor management assessment finding;
- There has been a minimum of 3-months break in service; and
- The labour/service provided differs from the work previously undertaken when employed by the University"
Special care should be taken when considering whether to engage a former staff member who accepted a voluntary redundancy or was retrenched. The University’s Enterprise Agreement specifically outlines re-employment restrictions, unless authorised by the Vice-Chancellor. This should only be considered in circumstances of critical business need because of the significant risks which include:
- Potentially undermining the genuineness of the redundancy;
- Exposing the staff member to having the favourable tax treatment of their redundancy/retrenchment payment overturned by the Australian Tax Office; and
- Creating a sham contract.
Contact your HR Advisor for further advice.
More information can be found on Sham Contracting.
Honorariums are a one-time payment made to an individual, who is not a university staff member, as a reward for a special or non-recurring voluntary activity for which a fee is not legally required and where payment is not expected. The amount must be small (e.g. $100 given to a volunteer in appreciation of their services). Honorariums should not exceed $300.
It is acceptable to reimburse volunteers token amounts to cover costs (e.g. transport, parking).
Payments over $300 are generally not considered honorariums, and if the recipient is not able to provide an invoice with an ABN then PAYG will be deducted. Superannuation may also apply.
Note however, honorariums are considered assessable income for the recipient by the Australian Taxation Office, if they are received for professional services voluntarily rendered. Refer to the ATO website for more information.
Fees paid to external examiners (sometimes called Examiner Honorariums) for Masters or Doctorate theses marking, not exceeding the rates recommended by Universities Australia, can be paid with no PAYG deduction. A Statement by Supplier form must be completed by the recipient for payments within Australia.
Please contact your HR advisor or email firstname.lastname@example.org if you have any queries.
Payments to External Advisory Panel or Committee Members
Applicable to panel or committee members who attend meetings in an advisory capacity only and are not involved in the day to day running of any aspects of the University. The appointment of External Advisory Panel or Committee Members and the details of that appointment should be set out in a letter. The Contractor Assessment form needs to be competed.
It is preferable for Panel Members to invoice the University of Adelaide either:
- via their University or employing organisation
- or with their own ABN (Note - superannuation is payable if individual/sole trader, not if the entity is a company, partnership or trust)
If the Panel Member is an individual/sole trader then superannuation applies and the Contractor Engagement steps should be followed to enable payment via HR. HR will contact the individual to obtain Superannuation and other relevant details to enable payment.
If the individual does not have an ABN then PAYG tax will be deducted at 47%.
Invoice from University,
Partnership, Company or
Trust with ABN
Individual no ABN,
PAYG Tax to be deducted No No Yes Superannuation Applies No Yes Yes
How do I apply for an exemption for a special circumstance contractor engagement?
Exceptional circumstances may be considered by the Executive Director, HR, if deemed acceptable as a result of the contractor management assessment finding.
Please contact the Contractor Compliance Officer in the first instance outlining the reasoning as to why you are seeking an exemption for the engagement email: email@example.com.
Why do I need to seek advice about a change to services or engagement?
A change to services agreed with a contractor may trigger a change to the obligations of the University.
If previously paid through Finance - Accounts Payable, this may need to change as employer obligations can change per engagement type.
Will contractors have access to University systems including SSO?
Contractors will not automatically have access to University systems. If this is required to support the nature of their work then a visitor access account will also need to be requested.
Does a contractor need a Contractor Service Agreement (CSA)?
CSA is necessary in determining an employee/Contractor Relationship. Recent decisions clarify and confirm that, generally, it is ONLY the rights and duties provided under the contract that must be considered in determining whether a person is an employee or an independent contractor:
Examples of contingent worker payments.
Here is a list of the type of engagements which have the potential to be deemed a contingent worker with on costs:
- Contractors providing specialist services such as placement supervisors/facilitators/exam moderators
- Research grant reviewers who are engaged as specialists within their fields to analyse research grant applications
- Clinical trial patients
- Honorariums over $300
- Award payments to staff and titleholders
- Performers, actor patients, guest speakers and board members (often receiving once off payments)
- Individual third party contractors whose contracted period is less than 90 days in total for all contracts within a financial year (payroll tax only, superannuation remains in scope for any time worked, regardless of duration)
- Chancellor and Board Members
Examples of payment types that are processed directly via Finance
These payments generally do not require a contractor management assessment outcome to be attached:
- Staff reimbursements with the exception of adhoc payments for use of private vehicle, which is claimed through Staff Services Online (SSO)
- Royalty Payments
- Engagement of a Company/Partnership/Trust. Note Payroll tax can still be applicable under certain conditions
- Scientific Writers (provided the individual is not a university staff member)
- Homestay Payments
- Award payments to students
Refer to https://www.adelaide.edu.au/finance/faq/ for more details.