Temporary Staff Resourcing

Overview

freespirit resource staff to recruitment agencies & clients across Australiafor permanent & temporary assignments.

Our candidates are sourced via accommodation networks, advertising,expos abroad, referrals, website job boards and word of mouth. We alsooffer visa & migration services, salary packaging & payroll support.

At freespirit we have helped over 40,000 talented people with differentbackgrounds & skill sets, achieve the best they can and so help thethousands of clients we have looked after.

Our success depends on attracting quality clients & staff.

As is often said “Your greatest asset is your staff”

But they are also your most time consuming, risky & expensive overhead,that use up unrelenting amounts of management time.

Overview

Management & administration of temporary staff requires additional costsin employing those with the specific knowledge in recruitment, industrialrelations, immigration, taxation, risks & costing.

Valuable time is consumed by trying to find and maintain temporary staffon a recurring basis.

Did you know? Human resource management, staff overheads & othercosts can be up to an additional 50% on top of the staff wages &superannuation.

In good times or slow periods administrative overheads increase ordecrease, as demands for your business change.

freespirit will grow with your business and remove the burden of IRresponsibilities by allowing you time to concentrate on the development &growth of your business, while we are left to deal with theseadministrative overheads.

freespirit

• Sources Staff & Contractors for you.

• Accepts requests for new Candidates

• Accepts transfers of your existing Staff & Contractors.

• Hires them back to you.

• Pays the Staff & their packaged benefits to improve Staff retention.

Advantages

• Additional untapped stream of pre-screened candidates.

• Attractive salary packaging benefits, hassle free for you, improvingcontractor & staff retention

• Australian company with over 18 years experience

• Candidates already seen - Peace of mind & time saving

• Dedicated Client Service team to help staff with any questions

• Free initial staff sponsorship & migration services advice

• Job advertising free of charge

Advantages

• No PAYG, Payroll Tax, Workers Compensation or FBT returns or auditsto worry about

• No staff termination costs

• Payment of PAYG Tax, super & benefits taken care of

• Prompt electronic payments

• Source staff quickly, just by visiting our website

• Tax effective salary packaging advice

• Tax return service for staff

Structure

& Public Liability

PAYG

i.e. Service Provider

Services

Benefit Provider

Hire

Pay

PayPay

PayPay

Pay

How it Works

Once you appoint freespirit…

• You provide Job Specifications online via our website or by email. Thisincludes Position Title, term & base rate that we add our margin andon-costs to.

• You also have the option to transfer your existing staff, who are thenemployed by Us. The transfer is a electronic, simplistic, one signatureapproach.

• We search our database, interview & screen for suitable candidates.

• We arrange interviews with you.

• For those accepted by you, we establish & maintain their payroll &salary packaging. We train them in our staff MBPCloud systems,which may have your brand & be a link on your website if you wish.

How it Works

• The staff are then contracted by us to hire to you.

• Staff complete our electronic timesheets, which are sent to you in onelink at the end of the period for approval.

• You are invoiced at the end of each period for all the staff, in onesimple payment transaction for immediate payment (24 hours).

• Funds are collected by direct debit or deposit.

• We are responsible for all the staff payments including: Net Pay,PAYG, Superannuation, FBT, Payroll Tax, Workers Compensation &Public liability.

• We meet the costs of resourcing & candidate search.

• You continue to hire the staff & we source additional staff for you. Ifyou have a candidate that requires a visa, we will arrange that too.

Payroll Tax

Introduction

The employment agency provisions are in Division 8 of Part 3 of the Act.These provisions apply to an employment agency contract (whetherformal or informal) where a person (the employment agent) procures theservices of another person (service provider) to work for a client. Undersuch a contract, there is no agreement between the service provider &the client.

The diagram below depicts a common employment agency arrangement.

Service Provider Employment Agent Client

Payroll Tax

Under the employment agency provisions, the employment agent is takento be the employer (section 38) and the service provider is taken to bethe employee (section 39). Amounts paid or payable under theemployment agency contract are taken to be wages (section 40(1)).Consequently, under section 41, the employment agent is liable to paypayroll tax on the amounts taken to be wages.

A „chain of on-hire‟ occurs, when an employment agent on-hires a serviceprovider to another employment agent, who in turn on-hires the serviceprovider to it‟s client. This would usually mean that both employmentagents are liable for payroll tax on the same arrangement.

Chain of on-hire

Example of a „chain of on-hire‟ diagram:

The solid arrows indicate the first employment agency contract whereAgent 1 procured the Service Provider for their client, Agent 2.

The dashed arrows indicate the second employment agency contract,where Agent 2 procured the Service Provider through Agent 1 for theirclient, Business 1.

Under this chain of on-hire, Business 1 pays $100 to Agent 2. In turn,Agent 2 pays $75 to Agent 1, & Agent 1 then pays $50 to the ServiceProvider.

Service Provider Agent 1 Agent 2 Business 1

Ruling

Application of the employment agency provisions:

Agent 2 would be an employer under section 38 of the Act and the payment of $75 to

Agent 1 would be wages under section 40(1) of the Act. Similarly, Agent 1 would alsobe deemed to be an employer & the payment of $50 to the Service Provider would bedeemed as wages.

Ruling

To overcome this, a Ruling has been issued that the employment agent closest tothe ultimate client will be regarded as the agent liable for payroll tax.

Example: only Agent 2 (who is the employment agent closest to the ultimate client) isliable for payroll tax on $75 paid to Agent 1.

Taxable Wages

$50 $75 $100

Service Provider Agent 1 Agent 2 Business 1

Declaration

In order for Agent 1 & Agent 2 to know exactly their payroll taxobligations, Agent 1 should require Agent 2 to complete OSR Payroll TaxForm OPT 20 (Employment Agency Contractors – Chain of on-hiredeclaration).

This will overcome both Agent 1 & Agent 2 being liable to pay payroll taxon the same arrangement.

In completing this Declaration, Agent 2 will confirm either it is:

• not liable for payroll tax, or

• will pay payroll tax on the „wages‟ paid to Agent 1

Example

If Agent 2 indicates on OSR Payroll Tax Form OPT 20 that it:

a) is not liable for payroll tax (because its total wages is below thetaxable threshold), Agent 1 would be liable for payroll tax on the $50paid to the Service Provider; or

b) will pay the payroll tax on the arrangement, Agent 1 is excused fromliability on the payment made to the Service Provider.

Reference

Payroll Tax Act 2007 Revenue Ruling No. PTA027

Insurance

Public Liability

Public liability insurance covers your potential liabilities to third parties forpersonal injury or property damage, should you or your business be foundto be negligent. Statute laws impose a 'duty of care' upon certain people,including employers, owners of property and suppliers of goods. If youare found to have breached your duty of care, you may be liable fordamages.

Professional Indemnity

Insurance protects professionals who are legally required to provide ahigher degree of skill & care, against negligence claims by a client. Thisinsurance is available across a range of industries & covers the costs &expenses of defending a legal claim, as well as any damages payable.

Workers Compensation

If you employ or hire workers on a regular, casual or contract basis, you areconsidered to be an employer and must have a worker‟s compensation insurancepolicy. The contract may be expressed or implied, verbal or written, and it may be

a contract of service or apprenticeship.

As per the Workers Compensation Act, the employer has to cover it‟sworkers against workplace accidents and Labour hire agencies & grouptraining companies are usually the direct employers of on-hired workersand the clients (host employers are not responsible for this purpose).

Contact

[Name]

Resourcer

freespirit

T : 1300 373 377

E : [name]@freespirit.com.au

www.freespirit.com.au