Remote retains the same margin on sub-contracts to other business entities as we keep for our staff servicing casual employment contracts. The reason for this is that the costs of winning and supporting contracts remain basically the same, whether the work is undertaken by Remote’s casual staff, or a sub-contracted business.

There is one exception that relates to the payment of payroll tax that is described in Question 4 below.

Remote will pay WorkCover for all Remote representatives (including sub-contractors) to ensure they are suitably insured in the process of delivering contracts. Remote’s insurance means that a sub-contractor need not pay personal injury insurance again and is covered during the conduct of the contract with Remote.

Remote’s insurance is limited to the workplaces and scope described in the sub-contract with Remote. A sub-contractor undertaking additional work in other client sites, or in the delivery of effort that is in no way related to the sub-contract with Remote, will need to purchase their own insurance for these efforts.

Remote’s professional indemnity and professional liability insurance protect Remote Pty Ltd only. Sub-contractors may choose to purchase these insurances to protect their own business interests.

Remote must pay Payroll Tax (PRT) in the jurisdiction to which payments are made. In some cases, Remote can pass responsibility for PRT obligations to the sub-contracting entity. Where this is possible, the margin retained by Remote will be reduced by the exact amount that Remote would otherwise have had to pay in PRT.

Passing on responsibility for PRT obligations to a sub-contractor does not imply the sub-contractor is obligated to pay PRT. It means the sub-contractor will be responsible for paying PRT if a PRT liability emerges as a result of their business operations and the processing of their own payroll.

In some circumstances, a sub-contracting entity that assumes responsibility for PRT obligations may be able to completely avoid paying PRT if their total Australia-wide payroll falls below the thresholds in the jurisdictions where payroll is paid.

In order for Remote to be able to pass the obligation for paying PRT to the sub-contracting entity, a number of conditions need to be met.

Some of these include:

• the sub-contractor provides similar services to more than 2 of its customers (not including Remote)
• the sub-contractor must derive no more than 60% of the company’s income from Remote

In the event that the sub-contracting entity qualifies to assume responsibility for PRT obligations, Remote’s sub-contract agreements will specify that the sub-contractor will be responsible for assessing their own PRT liability and paying any liability that is identified, either at the time of the contract, or at any time after.

For Time & Materials sub-contracts, your employees will need to record their time and expenses in Remote’s electronic timesheeting system and have client supervisors approve their timesheets. At the end of each calendar month, when correctly rendered timesheets and expenses have been received by Remote, we will raise a Recipient Created Tax Invoice (RCTI) and process your payment on the Thursday in line with Remote’s fortnightly pay cycle.