Frequently Asked Questions about
Paying People for their Services
These are some of the most commonly asked questions we are asked about.
If you can’t see an answer to your question, please feel free to contact us and we’ll be happy to help.
Q. How do you Pay people for their Services
Correct categorisation & documentation is required when making payments to people for their services.
Since the implementation of the new tax system in 2000 the following applies when an organisation is paying people.
A supplier of personal services is either:
- An employee,
- A supplier, or
- A person not carrying out a enterprise – it is is made as part of a private recreational pursuit or hobby
- A Volunteer
The correct procedure/documentation for these must be followed as below:
1. An Employee:
- a Tax File declaration form is required to be completed and submitted to the ATO
- Employee must be paid under the Fair Work Commission– Read More
2. A Supplier
- Must have an ABN.
- They may or may not be registered for GST
Must supply a valid Tax Invoice – Read More
3. A Person not carrying out an enterprise
If payment is made to a person who is not an employee or does not have a registered ABN, this form is required to be completed and kept with any other supporting documentation. If this form is not completed, then the paying organisation is obliged to withhold 48.5% of the amount and submit to the ATO in the next BAS
4. A Volunteer
Volunteer paid in cash as a honorarium, reimbursement or allowances – Read More
If you have any questions, please do not hesitate to contact us at Benkorp