Content updated 8 October 2026
Originally published 1 February 2023 · About Bradley Stewart
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Some independent contractors must receive super guarantee. An ABN, invoice or contract describing someone as a contractor does not settle the issue. Review the actual engagement and the special super rules before treating a payment as outside payroll.
When can a contractor be covered?
The ATO explains that a contract mainly for an individual’s personal labour or skills can attract super where the person must perform the work themselves and is not paid to achieve a specified result. Labour includes mental effort as well as physical work.
Assess the contract as a whole: what is being supplied, how payment is calculated, whether another person can perform the work and who bears responsibility for the result. Providing tools or materials does not automatically remove the obligation. See the ATO’s contractor super guidance.
Is this the same as being an employee for every purpose?
No. Employment law, PAYG withholding, payroll tax and super can use different tests. A conclusion for one obligation should not be copied across without checking. Fair Work’s contractor guidance explains why super can still be relevant to an independent contractor.
Calculate and pay the correct amount
Where the special labour-contract rules apply, identify the labour component rather than automatically calculating super on GST, materials and equipment. Document the basis for any split. An increased cash invoice paid directly to the contractor does not substitute for an eligible contribution to their super fund.
From 1 July 2026, Payday Super generally requires 12% of qualifying earnings to be paid on payday and received by the fund within seven business days, subject to applicable extensions. See the ATO’s Payday Super overview and our employer super checklist.
A practical contractor review
- Keep the signed contract, variations and representative invoices.
- Record delegation rights, payment terms and the work actually supplied.
- Identify whether you engage an individual or a separate company, trust or partnership.
- Obtain and check fund details where super applies.
- Revisit the classification when the arrangement changes and investigate missed contributions promptly.
For example, paying an individual an hourly amount to personally provide services deserves a super review even if their invoice includes an ABN. That example is a trigger for checking the facts, not a ruling on every hourly engagement.
Discuss your circumstances
Stewart Private Accounting helps business owners in Perth and across Australia with accounting and tax support. Contact our team to discuss the records, scope and fees for your work.
This guide provides general information current at the update date. The treatment depends on your circumstances and the applicable income or FBT year.
