Welcome to the first MKS Group blog!
This is going to be used as a platform to discuss current tax updates, complex tax situation and new and innovative ways to do business.
Our first blog is going to discuss the impact superannuation within the business and subcontractor relationship. So, who does pay the super? Although common perception is that the subcontractor is independent of the business, and pays its own superannuation but this is not always the case! There are certain conditions that have to be met for business to be required to pay any superannuation. After all even though they might be paid as a subcontractor, are they really just an employee?
The following 4 tests must be satisfied for the business to be obligated to pay superannuation.
Test 1 – The subcontractor does not operate an independent business.
Test 2 – Payments are based on time worked rather than work performed.
Test 3 – The subcontractor uses the business’ tools and equipment.
Test 4 – The subcontractor performs the contract work personally.
As a business owner, you may now be thinking deeper about the situation and think does this apply to your subcontractors or as a subcontractor you may now be thinking that you are missing out on superannuation.
If you do feel this way, please give us a call!
Thanks for reading our very first MKS Group blog, we hope you look forward to next piece in the coming days and feel free to provide us with any suggestions as we love to know what you want to know!
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