Subcontractors who are deemed Employees under the Superannuation Guarantee Ruling must be paid Superannuation at least quarterly.

Superannuation payable for Subcontractors also need to be reported through Single Touch Payroll, therefore Subcontractors should be set up both as Suppliers and as Employees in Xero. A separate monthly or quarterly calendar (depending on how often the Businesses chooses to pay Superannuation to Subcontractors) should also be set up. 

As subcontractors are required to invoice the Business, Superannuation needs to be calculated from the net value of the invoices issued by Subcontractors over the relevant period.

Finally, the calculated Superannuation must be entered as a part of a special monthly or quarterly pay run and reported to the ATO through Single Touch Payroll.

Run the Subcontractors Invoices Report

1. Go to Accounting > Reports
2. Click on the [Custom] Tab
3. Open the Report: Subcontractors Monthly/Quarterly Invoices
   
   è  The report opens
   
   
   
   
4. Make sure the reporting period is correct, then click on Export > Excel

Calculate Superannuation

1. Open the Excel Report and click on [Enable Editing]
2. Save the report in the Client's Folder > Bookkeeping > FYXX > Payroll > Super EMP
   
   è  The Subcontractors Report Excel Format
   
   
   
3. Right-click on the Status Column and select Insert
4. Name the new Column Heading Super, then type the current Statutory Super percentage rate in the cell directly below
5. In the Super Column go to the cell of the first subcontractor's invoice subtotal and use the following excel formula Net Subtotal*Super Rate%
   
   è  The Subcontractors Report Excel Format
   
   
   
   
6. Copy the cell and paste it across all other Subcontractors' invoice subtotals
7. In the Total Line, run a total of all Subcontractors' Superannuation (you can use the Sum Formula to calculate this total)
8. Save the changes in Excel and then Save the Excel file to PDF