Should my sub-contractor be paid superannuation?

18 November 2022

In light of High Court decisions made earlier this year, determining the status of contractors, the Australian Taxation Office (ATO) has revised its Superannuation for Subbies test.

It has widened the situations where you will not be responsible for paying superannuation for sub-contractors that hold an ABN.

A responsibility to pay superannuation is now largely dependent on the existence of a written contract between the parties that enables the subbie to delegate the work to another person. Where this is the case superannuation is not payable.

However, keep in mind that the contract must reflect the reality of the arrangement and not just be worded to avoid any superannuation obligations.

Where you have a contract in place that provides for superannuation it will not be voided by this change and if the parties agree to make changes a new contract will be needed.

Members are encouraged to do the ATO test for each sub-contractor and keep the results on file as these may be relied on if there is a claim for superannuation later as longs as the test has been accurately completed.

Please contact the Workplace Relations Team or call on 1300 30 50 10 if you have any questions on how this change may apply to your arrangements.