The information below applies to working directors, sole traders or individual partners in a partnership who wish to register and accumulate long service leave benefits for themselves.
Registering as a contractor
Note that registration for contractors in the scheme is voluntary.
Contractors who elect to be in the portable scheme are required to lodge a quarterly return through the Worker Portal.
Each quarter the contractor will need to declare how many days they worked and their ordinary remuneration or their profit component of the income for the quarterly return period. A 2.5% levy is then calculated on the ordinary remuneration or profit component that is declared. Most contractors use a minimum daily rate of pay of $130 to calculate the ordinary remuneration to be declared.
Long service leave benefit
The long service leave benefit of a contractor is different than that of an employee.
While employees are normally granted a period of paid leave, contractors receive a refund of their levy contributions plus interest. While no tax will be deducted by the Authority on this payment, contractors should declare the refund of contributions and interest as income on their tax return for the year in which the payment was made.
If a worker has recorded service as both a contractor and an employee, then the amount paid will be split into a contractor component (calculated as above) and an employee component. Note that tax will only be deducted from the employee service component.
Determined rate of interest
The interest applied to contractor levy contributions is determined every 6 months as:
- 75% of the rate of return for the scheme fund investment (if the fund made a return); or
- nil (if the fund did not make a return or made a loss).
Refer to Contractor Interest Rates for additional information.
See Claims for further information on entitlements and how to claim.
Contractors who do not record any service for a period of 4 continuous years, either as a contractor or as an employee, will be deregistered.