Adding a Contractor

Adding a contractor to your business is easy with the help of the simplified new employee wizard. Once you have enabled the Contractor Management function within your Advanced Settings, you will be able to create an employee or independent contractor via the new employee wizard. 

To start the new employee wizard, from your dashboard select Add Employee;

Step 1. Personal Details

The following fields in Personal Details must be completed in order to progress to the next screen:

1. First Name
2. Surname
3. Date of Birth
4. Residential Address Line 1
5. Residential City
6. Email Address, if "Employee Notifications" = Email
7. Mobile Phone, if "Employee Notifications" = SMS. Mobile number must have a maximum of 11 digits and start with a prefix of '02'.                                                                   

• The title field is optional.
• The gender field will auto-populate with 'unspecified' and this can be overridden. 
• When entering an address, auto-complete suggestions may be presented. To pre-fill an address, click on a suggestion. This will also auto complete the Residential City field. If the suggestions are not adequate or the employee lives overseas you will need to tick the checkbox Enter Residential Address Manually. This will open additional fields and all fields (other than Residential Address Line 2) must be completed. Also note that, outside of Country, all other fields are free text so there will be no validation done to ensure the address is correct.       
• If the employee's postal address is different to their residential address, deselect the Postal Address is the same as Residential Address checkbox. Additional fields will appear where you can enter the postal address details.                                                                                                       
• The Employee Notifications setting controls if/how the employee will be notified when new pay slips are available, when leave requests and/or expense requests have been actioned by their manager, rostering notifications and so forth. If you do not want an employee receiving any notifications, select "None". If the option "Manual" is selected, employees will not receive any notifications however payroll will be able to easily view/download pay slips just for 'manual notification' employees so they can then print these pay slips only and issue to the employees. 
  
    

• The Self-Service setting controls whether the employee will have access to their employee portal (where they can view their pay slips, apply for leave, action shift requests, etc). If you select "Yes", the employee will be sent an email or SMS (depending on their notification setting) with instructions on how to set up their password and log into their portal. 

This screen is also where you select that the employee is working as an independent contractor. The option is listed below the Date of Birth and Gender fields, as shown below. This will be deselected by default and if selected, the remaining steps of the wizard have been simplified to cater specifically for contractors. If this option is left deselected, the regular new employee wizard will apply.

Step 2. Banking

The second step of the wizard only contains the banking details as KiwiSaver is not applicable for independent contractors. 

Entering the employee's banking details is compulsory.

• Bank details: There are 3 options of Electronic (via a bank file), Manual deposit or Cash/Cheque.
• Account Name is auto-filled from the employee's name. You can manually delete the auto-filled account name and enter in the account name as well. 
• Account Number is 15 or 16 digits which consist of the bank code, account number and suffix. 

Step 3.  Employment Details

This section allows the user to configure the pay details for the employee such as rate of pay, pay schedule and primary location.

Start Date: Compulsory field. Select the employee's start date. 

Primary Location: Compulsory field. The primary location value is the location that will be assigned as the employee's default location. If the employee will be working in more than one location you can select multiple locations once you have completed the employee wizard. You can attach more than one location to an employee via the "Locations" screen within their employee details file.

You can also create a new location from the Primary Location field by clicking on '+ Add New' in the drop down. 

Pay Schedule: Compulsory field. Pay Schedule options can be Weekly, Fortnightly, Monthly, Twice Monthly. You can set up your pay schedules via your business pay schedule settings which will then appear in the Employee Wizard to select from. 

Pay Rate: Compulsory fields. If you are paying an employee an annual salary, ensure you enter the annual salary in the Pay Rate field and then change "per Hour" to "per Annum". Similarly for per day pay rate and changing "per Hour" to "per Day".  

Primary Pay Category: Compulsory field. Pay Categories are used to define the rates that employees are paid. Primary default pay category options are generally: Permanent Ordinary Hours, Casual Ordinary Hours, as well as a list of Leave pay categories. You can set up different pay categories based on your company's structure and requirements. 

Leave Allowance Template: Optional field. Leave allowance template defaulted to 'No leave entitlement' for contractors.  Further reading on leave allowance templates can be found here.   

Leave Year Starts: This field will appear where you have selected a Leave Allowance Template that includes the 'Based on employee's leave year setting' and also if you are using the system default leave allowance templates. Leave year start options are 'Employee's start date' or 'A specified date'. Where 'A specified date' is selected, a date picker will appear for you to enter in the correct specified date to ensure accurate calculation of leave entitlements for the employee. If you are using the system default leave allowance templates, you should select 'A specified date' and then enter the date 6 months after the employee's start date. The reason for this is so that Sick Leave and Domestic Violence Leave entitlements hit the employee's leave balance at the correct time. 

Timesheets: Optional field. Timesheet options are 'Do not use timesheets' and 'Use timesheets'. If the employee is not required to submit timesheets in order to get paid and/or are paid their set number of hours by default, select 'Don not use timesheets'. This will then activate the setting for the employee to be paid the number of hours set in their file by default in the pay run.

Once all Employment details have been entered in, click on the 'Next' button to continue to the next step. 

The employment type and ESCT Rate % have been removed as they are not required for independent contractors.

Step 4. 

This section is for entering the tax code declaration information for the independent contractor.

IRD Number: This is a compulsory field. Enter in the employee's 9 digit IRD Number.

Tax Rate: This is a compulsory field. Enter the tax rate the contractor has provided you, this will be used to calculate the PAYE. 

Tax Rate End Date: This is an optional field for contractors. Enter the expiry date of the tax rate the contractor has provided you, this will be used to determine when a new tax rate is required. 

Registered for GST: This is a new option where you will select if the contractor is registered for GST. If this option is selected, you will see an earnings line for GST within the pay run.

Date Signed: Optional field. Enter the date the employee signed the Tax Code Declaration form in the Date Signed field.

Once you have completed the details, click on the 'Done' button. 

At this stage, the basic payroll setup for the contractor is complete. The contractor is now able to be included in pay runs.

There are additional customisation options available once the employee has been added into the system. Click on the '<employee's name> Details' button if additional configuration is required for the contractor, for example:

• Configuring additional pay rates
• Configuring and adding in leave allowances
• Adding additional locations
• Adding additional bank accounts
• Setting up deductions or adjustments

Importing a Contractor via Excel / CSV

Importing employees, including contractors from a XLSX or CSV file is a great way to get set up and running quickly.
Hint: it is also a handy way to perform bulk updates of employee data

The Import Employees feature can be found in the menu under the "Add Employee" tab:

The best way to get started is by exporting the XLSX or CSV template file, adding data to it and then re-importing it. To export the template, click the Export button and then click on the down arrow to choose an Empty Template, then choose whether you want to work with an XLSX or CSV Template:

This file contains the column headers for the import. You simply need to add a row for each employee that you wish to import.

Once you have finished editing the XLSX or CSV file, you can upload it by clicking on Import > Select File > upload file > Open > Confirm Upload?. The import will then begin.

 Once the import is complete, a report will be displayed showing you the employees that were created/updated.

File Specification

There are quite a few fields in the file however they are broken into sections as shown below and not all sections need to be present.

The most important field when adding a contractor is the Employment Type. This needs to be set on Independent Contractor to correctly configure the employee.

Minimum Required Fields

To setup an employee to be processed in a pay run the following fields are required as a minimum:

• FirstName
• Surname
• DateOfBirth
• ResidentialStreetAddress
• ResidentialSuburb
• ResidentialState
• ResidentialPostCode
• PostalStreetAddress
• PostalSuburb
• PostalState
• PostalPostCode
• EmploymentType
• StartDate
• PaySchedule
• PrimaryPayCategory
• PrimaryLocation
• PaySlipNotificationType
• Rate
• RateUnit
• HoursPerWeek
• BankAccount1_BSB
• BankAccount1_AccountNumber
• BankAccount1_AccountName
• BankAccount1_AllocatedPercentage
• TaxCodeDeclaration_IrdNumber
• KiwiSaver_EnrollmentStatus
• KiwiSaver_EmployeeContribution
• KiwiSaver_EmployerContribution

Once an employee is set up in the system, import files may contain a smaller subset of fields but the following must always be included in order to be able to identify the employee to update:

EITHER:

• IRD Number

OR:

• First Name
• Surname
• Date of Birth

If you have any questions or feedback please let us know via support@nzpayroll.co.nz