Adding a Contractor

Adding a contractor to your business is easy with the help of the simplified employee wizard.

To add a contractor to your business, you first need to ensure the Enable contractor management checkbox is ticked.

To do so, carry out the following:

1. Click the Business icon in the main menu.
2. Click Payroll Settings.
3. Scroll down to where your screen says ADVANCED then click Advanced Settings.
4. Tick the Enable contractor management checkbox (or leave it if it is already ticked).

   

Step 1. Enter the Employee's Personal Details

Once you have enabled the Contractor Management function, you will then be able to create an employee or independent contractor.

To enter the Employee's details, do the following:

1. Click the Employee icon in the main menu.
2. Click Add a New Employee.

You will now see be on the 'Add Employee' page where you will see form entitled Personal details.

3. In the Personal details form, enter the relevant information in the following fields that are mandatory:

• First Name
• Surname
• Date of Birth
• Residential Address Line 1
• Residential City
• Email Address, if "Employee Notifications" = Email
• Mobile Phone, if "Employee Notifications" = SMS. Mobile number must have a maximum of 11 digits and start with a prefix of '02'.
  
  Important notes about the Personal details form:                                                   
  • 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. If it is selected, however, 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.

4. Once you have entered the relevant details, click Next.

You will now be taken to the second part of the form, which will now be entitled Banking & KiwiSaver.

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.

1. 1. Enter the relevant information into the following entries on the Banking & KiwiSaver form:
      
      

      Bank details
      Under this field heading, there is a dropdown with 3 options: Electronic (via a bank file), Manual deposit or Cash/Cheque.

      Account Name
      This 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
      Your input here needs to be 15 or 16 digits, which consist of the bank code, account number and suffix.
      
      

   2. Click Next.

You will now be taken to the third part of the form, which will now be entitled Employment details.

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.

1. Enter the relevant details in the following fields:
   
   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 dropdown.
   
   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 field. 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 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.
   
   
2. Click Next.
   
   You will now be taken to the fourth part of the form, which will now be entitled Tax code declaration.
   
   

Step 4. Tax code declaration

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

1. Enter the relevant information into the following fields.

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

Tax Code: This is where you will enter WT tax code.

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

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

2. Click Done. 

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, such as:

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

Further information: 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