What is Superannuation?
Superannuation, or Super is money put aside by the employer over the worker's working life for them to live on when they retire from work. Super is a long-term investment which grows over time.
For most employees or workers, super begins when they start work and their employer starts paying a percentage of the worker's salary or wages into a super fund account for them. The Super fund invests and manages this money for workers until they retire.
How is Superannuation managed on Worksome
If you engage Australian sole traders via Worksome, we are obligated to charge your the worker's Superannuation fees on top of your invoices. As of March 2023, the Superannuation contribution is 10.5% of the gross total of the freelancer's bill.
When creating a job for a sole trader, please make sure that the job rate is exclusive of Superannuation, or you will be charged twice.
Once your external worker had created a bill, and you have approved it, Worksome will add the Superannuation fee on top of your invoice as a separate line item.
Example:
1) Client A wants to hire Australian sole trader B.
2) They agree on a daily rate of 1,000 AUD excl. Superannuation & GST.
3) Client A creates a job and sets the daily rate to 1,000 AUD
4) The worker accepts the job offer and, after the first day of work, creates a bill. (Please Note: This bill is not the final invoice, but only a representation of the hours worked, and therefore only shows the gross amount, excl. Worksome's service fee, Superannuation & GST)
5) Client A approves the bill.
6) Worksome sends Client A a final invoice, in which Worksome's service fee, GST & Superannuation are added. (Day rate + Service fee (4% of gross day rate) + GST (10% of gross day rate incl. service fee) + Superannuation (10.5% of gross day rate, therefore: 1,000AUD + 40AUD Fee + 104AUD GST + 105AUD Super = 1,249AUD invoice total)
7) Client A pay Worksome the invoice total of 1,249AUD
8) Worksome pays the worker the day rate of 1,000AUD (+ GST if applicable) and pays 105AUD into the worker's Super fund. (In rare cases where the worker does not have an own Super fund, Worksome has one set up for them)