Charging superannuation on invoices

Hopefully someone can help me here and is a sole trader. I need to somehow add super to my invoices long story but mainly working to one company so they pay my super. Now I can see a way to do it as withholding tax BUT is there a way to set it up. with out doing via the withholding as it not a tax of such. Also if there is not a way to do it is there a way to change the withholding labels on the invoice

Why not collecting superannuation directly from them… they pay you, you deposit the amount into your superannuation fund.

Under the tax laws they have to pay as I work to them 80 percent of the time so I need to work out how to add this to an invoice per job or as a total of the fortnights work

I don’t think you are required to invoice them for superannuation though. If they have to pay superannuation, they have to pay regardless whether you mention it on your invoice or not.

long story but the super laws have changed where if company x has sub contact y doing more than 80 percent of sub contact y work load then company x is by law require to pay the super not the sub connector .

this is where it get tricky I have to invoice them as it an extra charge on top of the job rates as it income so needs it to show on an invoice to then somehow reflect that as separate income to the business eg like withholding tax

I know but it’s up to them to work out how much to pay in superannuation and pay it on your behalf. I’m pretty sure you don’t have to mention superannuation on your invoice to them.

When the company pays this superannuation - are they paying the super fund directly or paying it to you? The normal process is for the company to pay the super fund directly as this saves the sub-contractor from “forgetting” to on forward the contribution.

If they are paying the super fund directly then you don’t need to invoice as its not income to your business.
If you want to advise them of the superannuation amount, you could add a note/comment to your invoice, but there is no need to record the superannuation contributions amounts in your business accounts.

If however (?), they are paying the superannuation to you, which you are then on forwarding then:

  1. Create a BS Current Liability account called Superannuation Clearing.
  2. When creating the Sales Invoice - Add Line - Account use Superannuation Clearing and enter amount.
  3. When the company pays the invoice, Receive Money in the normal way.
  4. To forward contribution, Spend Money with account being Superannuation Clearing.

The 80% test is only relevant to the Personal Services Income Rules relating to income tax and as a sole trader you are not affected by this test.

A sole trader has no obligation to pay superannuation for themselves. It is the principal contractor that must pay super if you are a deemed worker.

You don’t need to include super on your invoices to satisfy any superannuation laws. I assume it is only required at the request of the company you service in the case of a dispute over your agreed contract rate. It is their obligation to pay the super.

HI tony

Thanks for your answer I am aware of point 1 and 2 BUT here where it gets tricky Hence the question above re the invoice lol… The sole trader model has “no obligation to pay superannuation” but they are response to pay it if they wish which comes out of their earnings Being the Key. Now a company that Has a subbie that falls into the worker cat has to pay super NOW the company CAN withhold PART of the invoice total to pay that super under the law the same as they can hold withholding tax etc. Now that withheld part of the invoice is not earnings so it needs to be on the invoice as a correction to show the true earnings of the sole trader business earnings and also to show what been paid to super as the super side is tax free earnings so it needs to be taxed by the super fund eg the same way as salary suffice works. eg At 15 percent. It not as black and white as it appears.

Hi Brucanna

Thanks for your answer ya given me an idea on how to attack the above as the super amount is been taken from the invoice total so eg lets say I invoice for $1000 the other company is withholding $95 for the super side so I need to somehow reflect this on the invoice to show the true earnings of the business. Also to keep track of the tax free super payments as it before tax payments eg the same as doing a salary suffice


OK, that’s quite simple. When you Receive Money of 905, put 1000 to the invoice, add line, account = (P&L) Superannuation with amount -95.00 (note the minus sign). All expenses you have are a before tax payment.

Your true earnings is 1000, it just that the payee is spending 95 of it before you receive it, so you reflect that spend as an expense. No different from you receiving the full 1000 and spending the 95 superannuation yourself.