Tanda Payroll supports two ways to handle contractor payments. You can use Tanda to pay contractors directly (including automatic GST calculation), or you can manage superannuation only and pay the contractor's invoice outside of Tanda.
Staff configured as contractors are automatically excluded from PAYG withholding and Single Touch Payroll (STP) reporting.
Setting up a Contractor
Before a worker can be treated as a contractor in payroll, you will need to configure them as such in their employee profile. If the contractor is using the Tanda mobile app, they can also configure some of these details themselves.
Navigate to their staff profile under Workforce > [staff name].
Go to the Payroll > Tax Information tab.
Under Employment type, select Contractor.
Enter the contractor's ABN under the now-visible Contractor Details section:
Set Registered for GST and Pay superannuation to Yes or No, depending on whether you are obligated to pay super and/or GST to this contractor.
Click Save.
Note: Once a worker is set as a Contractor, Tanda automatically excludes them from PAYG withholding and STP reporting.
Contractor Self-Service Tax Declaration
Contractors can also update their own tax declaration through the Tanda mobile app. When creating or editing their tax declaration, they will see an Employment type toggle at the top.
Click the profile icon to go to settings and open the Tax Declaration tab.
If no tax declaration exists yet, click + Add a Tax Declaration.
Select Contractor from the Employment type options.
They will see two fields: ABN and Registered for GST.
The contractor enters their details, ticks the declaration, and clicks Submit.
An ABN is required for the contractor to be payable.
The Pay superannuation toggle will be set to 'no' by default. The contractor can't adjust this themselves in the mobile app, so an admin will need to configure this on the contractor staff profile.
Paying Contractors Through Tanda
If you want to pay a contractor's invoice directly through Tanda (via your ABA bank file), add their invoice amount as an earnings line on their payslip. Tanda will automatically calculate and add GST on top if the contractor is registered for GST.
After creating a pay run containing the contractor, find and open their payslip.
In the Earnings section, click + Add and enter any earnings they are entitled to.
If the contractor is registered for GST, a GST section will appear automatically with 10% of their total earnings calculated as GST.
The GST amount can be manually adjusted if needed by editing this field.
The contractor's net pay (earnings plus GST) will be included in your ABA bank file when the pay run is finalised.
No tax will be withheld from the contractor's earnings. PAYG withholding does not apply to contractors in Tanda.
Paying Super Only (paying the contractor outside Tanda)
If you pay the contractor's invoice outside of Tanda but are still required to pay them superannuation, you can use the Super Contribution Base field on their payslip. This is used to calculate the correct super amount, without paying the contractor through the ABA file.
Make sure Pay superannuation is set to Yes on the contractor's Tax Information tab.
Open the relevant pay run and click on the contractor's payslip.
Scroll down to the Super Contribution Base section.
Enter the labour component of the contractor's invoice in the Amount field.
Tanda calculates the super guarantee from this amount. The contribution base amount itself does not pay out as earnings and will not appear in the ABA bank file.
Note: Even if you have also added earnings lines to the payslip, Tanda will use only the Super Contribution Base to calculate super instead of those additional earnings.
