Choosing to Contract

in choosing the right option for you, be sure to consider your personal and financial circumstances carefully before making any decision.

We also recommend that you fully discuss the options with your accountant and/or financial planner well before you accept a contracting role.

If you are a permanent resident of Australia you are able to freely choose from any of the three options below, whereas the majority of non-residents choose the Management Company option.

If you have any questions or would like more detailed information on the different contracting options, please contact us.

Option 1 – PAYG Contractor

PAYG is an ideal option if you prefer the simplicity of Clicks managing all the time-consuming and costly administration tasks associated with being a Pty Ltd contractor.

As a PAYG (Pay As You Go) contractor, we take care of everything on your behalf including:

• Processing your pay
• Emailed pay advices
• Remitting PAYG tax to the ATO
• Deduction and payment of other amounts to Government agencies (e.g. HECS)
• Administering Superannuation to the fund of your choice
• Monthly payment of Superannuation (legislation just requires quarterly)
• Salary sacrifice of additional Superannuation contributions
• Issuing your annual payment summary in the first week of July
• Covering the administration costs for Workers Compensation cover
• Administering all Workers Compensation claims
• Administering $10m of Professional Indemnity and $20m of Public Liability Insurance

Option 2 – Pty Ltd Company

Pty Ltd contracting is an ideal option if you prefer the flexibility and control of running your own company.

As a Pty Ltd contractor you contract through your own proprietary limited company and need to:

• Work with your accountant to set up the company
• Register for GST
• Procure and administer Workers Compensation insurance
• Acquire Professional Indemnity and Public Liability insurances
• Administer your own Superannuation
• Complete BAS statements as required
• Prepare statutory accounts and pay for associated costs
• Contract under the increasing legislative challenges associated with the Alienation of Personal Services Income test (also known as the 80/20 rule)

What Costs Are Involved? Contracting as a Pty Ltd contractor involves a significant cost and time investment. Before choosing this option you should first carefully consult with your accountant.

Before You Start… After setting up your company, simply visit your local Clicks office bringing proof of ABN, Workers Compensation, Professional Indemnity and Public Liability Insurances and you’re ready to begin your contract.

Option 3 – Management Companies

Management companies are ideal for high earning contractors who can afford the fee structures and want many of the same financial benefits of Pty Ltd contracting, without all the associated risks and time spent administering a company.

Contractor Management companies specialise in providing support services to independent contractors. Management companies will:

• Provide you with a company tax structure to work under
• Act as your own tax expert
• Take care of all administration and back office support on your behalf
• Maximise your tax position
• Cover you for Workers Compensation, Public Liability and Professional Indemnity insurances

What Costs Are Involved? Contractor Management companies charge tax-deductible fees of around 5% per annum.

Before You Start… Make sure that you have selected a Contractor Management company and registered with them. We will need this information to ensure you are paid as quickly as possible before you start working with us.