Superannuation and Contractors

The superannuation legislation deems certain contractors (non-employee workers) to be eligible to receive superannuation contributions. The ATO interprets these deeming provisions to mean that your organisation needs to make superannuation contributions if the contractor meets all of these criteria:

  • the contractor is engaged directly, not through a company, trust or partnership, for whom more than half of the value of that contract is for the contractor’s labour;
  • the contractor is paid for their personal labour and skills, not by reference to achieving a result (e.g. contractor is paid an hourly rate); and
  • the contractor performs the work personally.

Typically, contractor agreements may try to push the responsibility for making superannuation contributions to the contractor-worker. However, this does not exonerate your organisation from the statutory obligation to make superannuation contributions.

If you are unsure of your obligations please get in touch to discuss further.

** and don’t forget SGC increases to 10% as from 1 July 2021 **

Categories Tax

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