Super for contractors

In the 2010-11 Federal Budget the government announced future changes to super. These changes, if passed by parliament, will change the information on this page. For a summary of these changes, refer to Introducing your super - Employers.

If you pay your contractors under a contract that is wholly or principally for labour, you have to pay super contributions for them. This is even if the contractor quotes an Australian business number (ABN). These contractors are considered your employees for Superannuation guarantee purposes.

Generally, a contract is principally for labour if more than half of the value of the contract is for the person's labour, which may include:

physical labour
mental effort, or
artistic effort.

We have web-based tools to help you work out if someone is an employee or contractor, and if they are eligible for super contributions:

Employee/contractor decision tool

Superannuation guarantee eligibility decision tool

To find out more about your super and choice of fund obligations in general, refer to the Guide to superannuation for employers.

How does the superannuation guarantee apply to contract workers?

If your contractors are employees, for the purposes of the superannuation guarantee, you must provide the minimum level of super contributions.

The minimum super amount you have to pay is 9% of each eligible employee's earnings base.

Your contribution should be calculated only on the labour component of the contract.

To work out how much super you should pay for each eligible employee, use our online super contributions calculator.

Australian Workplace Agreements (AWAs) are employment contracts between employers and employees. This means you have superannuation guarantee and PAYG Withholding obligations for any workers you employ under an AWA.

Last Modified: Thursday, 5 August 2010