Running a business in Australia means keeping track of your superannuation guarantee (SG) obligations. However, it is not always clear who you need to pay. If you're working with contractors, creatives, or gym staff, things can get tricky fast.
At Trekk Advisory, we help you understand your bills. This way, sudden SG bills, audits, or penalties won't catch you off guard.
Under Australian law, employers must pay compulsory superannuation to employees. But the SG rules go further than most people realise—they don’t just apply to traditional full-time staff.
The SG definition includes directors, contractors, entertainers, sportspeople, and more. If someone is doing work mainly on their own time and effort, they may be seen as an employee for SG purposes.
This is true even if they are not on your payroll in the usual way.
That could mean your yoga instructor, DJ, or videographer might be eligible for super—depending on how they’re engaged.
One of the more concerning parts of the super guarantee system is that there’s technically no limit to how far back the ATO can go to recover unpaid super contributions.
I the ATO determines someone should have been receiving super under the SG rules, they can chase the unpaid amounts, plus interest and penalties. That means even well-intentioned businesses can find themselves owing more than they bargained for.
It’s a good idea to regularly check your SG obligations and take a closer look at how you engage contractors. Clarifying the SG definitions, reviewing agreements, or even seeking a private ATO ruling can help you stay compliant and avoid unexpected issues.
A proactive review now can save you a lot of hassle later.
There are a few exceptions, such as:
SG usually doesn’t apply if you are working with a company, trust, or partnership. However, it is still good to review each setup.
Here’s where it gets confusing. Just because someone has an ABN and says they are a contractor, it doesn’t mean they are not subject to SG rules. If the arrangement is really just a contract for personal labour, they could be considered a deemed employee.
The ATO has outlined that you need to pay SG if the contractor:
Nuances exist here. For example, if someone gives a valuable asset, like a truck, it can be seen as a real business deal. However, this does not always mean they can avoid consequences.
If you're paying company directors for their duties, super guarantee contributions are required. The same goes for individual performers, creatives, and fitness professionals such as gym instructors, even if they operate as sole traders with an ABN.
Just because someone has their own business setup doesn't automatically remove your SG obligations. If they perform work under your direction, follow your procedures, use your equipment, wear your branding, or deliver services the way you train them to, they may be considered a deemed employee under the SG rules
In these situations, the SG definition can stretch further than expected, so it’s essential to reassess whether your working arrangements trigger super contributions. A bit of clarity now could prevent costly issues down the line.
Super guarantee eligibility can be tricky, especially when you're dealing with contractors, creatives or casual hires. Taking the time to review contracts, check working arrangements, and clarify how the SG rules apply to your team can save a lot of stress down the line. Keeping your records clear and your processes consistent helps ensure you stay compliant and confident.
Got a contractor you're unsure about? A band member booked for a festival gig? A coach or creative who invoices you monthly? These are the types of arrangements worth double-checking.
Need help sorting out your super obligations? Book a chat with your Trekk Advisory adviser today. Let's make sure you're paying the right people, the right way.