It’s not unusual for a worker to want to change their engagement type over the duration of their contract. Here's everything you need to know
A worker wants to change their engagement type - what next?It’s not unusual for a worker to want to change their engagement type over the duration of their contract. While it is more common that workers set up their own Pty Ltd company, and make the change from PAYG; sometimes they want to move from Pty Ltd to a PAYG set up.
Whatever the request, Oncore’s got you covered.
Please reach out to us straight away to let us know; we can then provide both you and your worker bespoke information on how best to manage the change.
There are a few items to consider such as:
- Aligning the change with the start of a brand new pay cycle, while also aligning this with the appropriate invoicing cycle (so there are no split invoices to your clients). It’s best to check with Oncore on what start date for the change is appropriate, prior to preparing a new contract for the worker.
- What state is the worker performing their duties in? If they’re changing to a Pty Ltd company, there are different requirements in different states for Workers Compensation insurance.
- What levels of Professional Indemnity and Public Liability are required by your client? Does your worker have sufficient levels of insurance? Or will they need to have these insurances extended to them? Who will cover the associated costs of these insurances?
If moving to Pty Ltd, be sure to confirm:
ABN; review the ABN provided via ABN lookup. This will ensure that you know whether the ABN is a Pty Ltd or a trust; and whether it is registered for GST (this link talks through requirements, but it is important ). It will also validate if this is a Sole Trader ABN, and therefore unable to be facilitated through an Oncore engagement.
Oncore follows compliance protocols to protect our customers and our own business, particularly concerning engagement models. In line with ATO legislation and best practice, Oncore takes a stance that we will not engage Sole Traders. We can assist workers to either move to PAYG engagements, or put them in touch with our network if they want to set up their own Pty Ltd entities.
If you are unsure whether Oncore can process payments via the ABN provided, please reach out to us; payments via Sole Traders and Partnership ABN’s are not able to be facilitated via Oncore.
If the ABN is for a trust we’ll need to ensure that we have a copy of the trust deed; that clearly shows the relationship between the trustee and the trust.
Insurances; does Oncore cover the insurance for your workers; or does your agency have their own insurances? The answer to these questions will frame the next steps that you need to take, along with the state that the worker performs their role in. If a worker is fully self insured, they will be required to provide certificates of currency for Professional Indemnity, Public Liability and Workers Compensation. In Victoria and South Australia, the party who is paying the Pty Ltd entity must report the distributions to the company as part of their own Workers Compensation premiums - so the worker is effectively covered by this party’s Workers Compensation insurance.
Documentation; company bank account details (must be in the name of the entity that we’re paying; and cannot be personal bank account details), company information including ABN and RCTI (recipient created tax invoice) consent form (this allows us to raise an invoice on behalf of the worker’s company when processing payment, rather than the worker having to prepare and send an invoice to Oncore. We can only raise an RCTI if the company is registered for GST, and insurance certificates of currency (if applicable and/or required).
If moving to PAYG, be sure to confirm:
Documentation; personal bank account details (must be in worker’s name or a joint account with one account holder being the worker), superannuation fund details (worker can select to use Oncore’s default IOOF fund, or a fund of their own choice) and tax file declaration form. While we can’t give workers advice on their personal tax situation, we can provide them links to ATO articles that can help with appropriate tax selections to make.
Please reach out to us on 1300 654 84 or via supportaus@oncoreserivces.com prior to drawing up any contracts, and we can discuss the above in detail with you. We want to make it as simple as possible for your workers to engage with Oncore in the way that suits them best - but we want to make sure that we get it right, and seamlessly transition them over.