If you’re a business owner, the last thing you want is unexpected financial obligations sneaking up on you, especially those tied to superannuation. Recent developments have highlighted that venues, gyms, and many other businesses may unknowingly be exposed to significant super guarantee (SG) liabilities. The SG rules cover not just your direct employees, but possibly also contractors, entertainers, gym instructors, and even company directors.
Who Needs to Receive Super Guarantee Payments?
Understanding who qualifies as an employee for SG purposes is essential. Beyond traditional employees, the SG definition includes:
- Company directors receiving remuneration
- Contractors primarily providing their personal labour
- State and Commonwealth government contracted workers
- Entertainers and sportspeople engaged to perform or present
- Individuals working in roles connected to entertainment or sports events (like videographers and producers)
Who is Excluded from SG Payments?
SG payments are generally not required for:
- Under 18s working less than 30 hours per week
- Private or domestic workers working less than 30 hours per week
- Non-resident employees performing work outside Australia
- Employees temporarily in Australia covered by certain international agreements
- Some foreign executives holding specific visas
- Individuals contracted through companies, trusts, or partnerships
If Australian employees work temporarily overseas in a country with a bilateral social security agreement (e.g., the USA), continue paying SG and obtain a certificate of coverage to avoid double payments.
Contractors and SG – A Common Misconception
Even if your contractor has an Australian Business Number (ABN) and your agreement explicitly states they’re responsible for their own super, you might still be obligated to pay SG. If their contract primarily involves their personal labour and skills, SG is likely payable regardless of contract specifications.
The Australian Taxation Office (ATO) specifies SG obligations clearly when payments:
- Are mainly for the individual’s labour (over half the value)
- Depend on personal labour and skills (not achieving a specified result)
- Are for work personally performed (cannot be delegated)
Recent rulings also clarify that using significant capital assets (e.g., trucks) may impact the classification, but each case depends on specific facts.
Special Cases: Directors, Performers, and Sportspeople
Directors performing company duties for remuneration are entitled to SG. For entertainers, sportspeople, or those working in related roles, the payer, be it a venue, festival organiser, or agency, typically bears responsibility for SG payments. Clarifying who directly pays performers impacts SG responsibilities significantly.
For example:
- A music festival operator directly hiring a sole trader performer is responsible for SG payments.
- If the sole trader hires band members, they bear SG obligations for these members.
- An agency supplying performers and paying them directly is responsible for their SG.
- If an agency only charges a booking fee and the festival pays performers directly, the festival manages the SG obligation.
What’s a Service “In Connection to”?
SG definitions capture workers closely involved with performers, such as producers, videographers, and editors. If these workers meet the SG employee criteria, SG payments are likely applicable.
Is a Gym Instructor Considered an Employee?
Gym instructors frequently fall within the broader SG definition of employees, particularly when:
- Paid per class or session
- Using gym equipment and systems
- Wearing gym uniforms
- Receiving training from the gym
If this scenario matches your situation, instructors are likely entitled to SG payments.
No Time Limit on SG Liability
Uncertainty around SG obligations can leave your business vulnerable, as there is no time limit on the ATO’s ability to recover unpaid SG contributions. This potentially exposes businesses to significant retrospective liabilities.
Protect Your Business—Let’s Get Ahead of SG Risks Together
When it comes to superannuation, guessing is risky business. At C&N Accountants, we understand how complex SG obligations can be, especially when you’re juggling directors, contractors, performers, or gym staff. As licensed Superannuation Advisers, we don’t just tick boxes; we provide clear, proactive advice to ensure you’re meeting every requirement and avoiding unexpected ATO surprises.
Every business is unique, and so are its obligations. That’s why we take the time to understand your specific arrangements and guide you through the grey areas with confidence. If you’re unsure where you stand, now’s the time to act.
Reach out to C&N Accountants today for a personalised SG review because peace of mind starts with knowing you’re covered.