ATO Interpretative Decision

ATO ID 2001/12 (Withdrawn)


Superannuation guarantee scheme: Whether Employee or Contractor
FOI status: may be released
  • This ATO ID is withdrawn as the interpretative issue is covered in Superannuation Guarantee Ruling SGR 2005/1
    This document has changed over time. View its history.

Status of this decision: Decision Withdrawn 3 February 2006
CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

This ATOID provides you with the following level of protection:

If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.


Whether the taxpayer, a provider of 'secretarial services', is treated as an employee or as an independent contractor for the purposes of the Superannuation Guarantee (Administration) Act 1992 (SGAA).


The taxpayer is treated as an independent contractor for the purposes of the Superannuation Guarantee (Administration) Act 1992 (SGAA).


1. The Principal engaged a Secretarial Service to provide confidential services such as production of letters for a particular client.

2. The Secretarial Service is operated by the taxpayer as a sole trader.

3. The Principal engaged the Secretarial Service through an advertisement in a newspaper.

4. The Secretarial Service performs the duties at the office of the Principal because the matters are confidential and letters are required to be on the Principal's letterhead.

5. The Secretarial Service has the right to refuse work.

6. The Secretarial Service can engage persons other than the taxpayer to perform the duties required under the contract. There is no restriction on who does the work.

7. There are no set hours for the work to be performed. Actual hours worked have varied from four to ten hours per week.

8. The Secretarial Service invoices the Principal for the work performed. The invoice details each individual task done.

Reasons For Decision

Under subsection 12(3) (SGAA), if a person works under a contract that is wholly or principally for the labour of that person, the person is an employee of the other party to the contract. Since the person working under this contract was free to engage another worker to perform the duties of the contract that person was therefore not engaged wholly or principally for their labour.

Superannuation Guarantee Ruling SGR 93/1 states that a contract is a contract for a person's labour if the work must be done by that particular person. If the contract leaves the person completely free to have the work performed by another person, then the contact is not a contract for labour of a particular person. The taxpayer in this case is considered to be an independent contractor and not an employee. As such, there is no obligation under the SGAA for the 'principal' to provide superannuation support for the taxpayer.

Date of decision:  7 September 1998

Legislative References:
Superannuation Guarantee (Administration) Act 1992
   subsection 12(3)

Related Public Rulings (including Determinations)
Superannuation Guarantee Ruling SGR 93/1

Employee vs independent contractor
Superannuation guarantee

Business Line:  Superannuation

Date of publication:  4 June 2001

ISSN: 1445-2782

  Date: Version:
  7 September 1998 Original statement
You are here 3 February 2006 Withdrawn