If you bring in extra help, the words “independent contractor” on an agreement are not enough on their own. The ATO looks at how the arrangement works in practice.
The real rules of super
Your Superannuation Guarantee obligation depends on the real working relationship, not only the contract wording. If you pay an individual contractor mainly for their labour and skills, they may be treated as an employee for super purposes even if they have an ABN and issue invoices.
Key factors to check
- Labour or result: If the contract is mainly for the person’s labour and skills, and they must do the work themselves, super may be required.
- Who you contract with: If you contract with a company, partnership or trust, the super rules are different from engaging an individual directly.
- Special cases: Under-18 employees and domestic or private workers generally need super only where they work more than 30 hours in a week.
If you are unsure, start with the ATO’s employee-or-contractor guidance and the ATO information on super for independent contractors, then get advice before the arrangement creates PAYG, super or back-payment issues.
Source: ATO – employee or independent contractor guidance; super for independent contractors.
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