AU Payroll - Unpaid Intern to be set up in Xero Payroll
Unpaid Intern. I have an Uni student doing an internship. We offered to pay $500 per month as a transport allowance. The unpaid intern is not an employee. When I wanted to set this person up in Payroll, I found limitations: the only available contracts are full time, part time and casual. I tried to set her up as casual, which is wrong, and link the transport allowance. An error pop up asking to calculate Superannuation. I give up.
In this case, MYOB is better, as we have an option to "not report" and we don't pay superannuation for the allowance, as the person is not an employee.
I googled it and someone else asked for the same case situation.
I would love to have a solution soon. Thanks.
Claudia Haddad
shared this idea
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Freya Pieroz
commented
You say 'superannuation' so I assume you're in Australia.
This is via uni, so it's a vocational placement, so per Fair Work Australia, the unpaid part is correct. However, because it's a flat rate Allowance, with no reference to (for example) c/km, it's not a reimbursement (which doesn't get reported via STP), and must be reported via STP. The coding for the Allowance should be:
- if it's public transport, Type: Other, Category: Transport/Fares
- if it's a private vehicle and the intern would be able to claim the related expense(s) as a deduction against the Allowance income on their tax return, Type: Other, Category: Private Vehicle
- if it's a private vehicle and the intern would NOT be able to claim the related expense(s) as a deduction against the Allowance income on their tax return, Type: Other, Category: Non-deductibleIf it's the last type, non-deductible, you have to pay super on it, but not if it's one of the other two types. Because it's a flat rate, you have to withhold PAYG no matter what, because it's classed as income (with associated expenses that may or may not be deductible) not a reimbursement.
https://community.ato.gov.au/s/question/a0J9s0000001Fmt/p00036989