Are You Paying the Right Super? Super Guarantee Compliance

Are You Paying the Right Super? SG Compliance for Contractors, Performers & Gym Instructors Explained

📌 How gyms, venues, and business owners could unknowingly be liable for unpaid super

Are You Overlooking Super Obligations for Contractors and Performers?

The superannuation guarantee (SG) system in Australia is more complex than many business owners realise. You might think you’re doing everything by the book—but if you’re engaging contractors, performers, or even gym instructors, you could be legally required to pay super without knowing it.

The Hidden Super Responsibilities Catching Business Owners Off Guard

The SG laws cover more than just traditional employees. According to the ATO, you’re required to pay super to any worker who:

    • Is a contractor working under a contract principally for their labour, even with an ABN
    • Can’t delegate their work to others (i.e. they must do the work themselves)
    • Is paid primarily for their labour and skills, not for achieving a specific result
    • Is a director, sportsperson, gym instructor, or entertainer performing personally
    • Is engaged in promotional or performance-related services (e.g. music festivals, fitness classes, or entertainment venues)

💡 This means the definition of ‘employee’ under SG rules is broader than under common law.

⚠️ Who’s Not Covered?

SG contributions typically don’t apply if the worker is:

    • Under 18 and working less than 30 hours per week
    • A non-resident working outside Australia
    • Employed under certain international agreements
    • A corporate contractor (e.g. a company or trust—not an individual sole trader)
    • A domestic worker working less than 30 hours per week

📌 The Danger of “Contractor” Labels

Many businesses mistakenly believe that hiring a sole trader with an ABN means SG doesn’t apply. That’s a costly assumption.

If the contract is mainly for the individual’s labour and they’re performing the work personally, you may be required to pay SG—regardless of the label on the contract.

Real-World Scenarios Business Owners Need to Know

🏋️ Case Study: The Gym Instructor

Let’s say a gym hires a sole trader instructor under an ABN. They wear the gym’s uniform, use the gym’s booking system, and are trained in-house. While the contract states they’re an “independent contractor,” they’re paid per class and session.

In reality?
The ATO would likely deem this instructor an employee for SG purposes.
👉 The gym would be liable for backpaying SG contributions, possibly going back years—with no fixed time limit.

🎤 Case Study: Festival Performers

A music festival pays a solo artist directly for a performance. The artist operates as a sole trader and hires backup musicians.

    • The festival is responsible for SG contributions for the solo artist.
    • The solo artist, in turn, is responsible for SG for the band members—if they’re paid for their labour and don’t work through a company or trust.

These layers of liability can quickly stack up—making it essential to understand who you’re really responsible for.

Know Your SG Obligations or Risk Penalties

Not only can the ATO recover unpaid SG going back several years, but directors can be held personally liable under the director penalty regime.

Whether you’re running a gym, venue, creative agency, or hospitality business, it’s vital to:

    • Assess worker arrangements (contractors, performers, instructors)
    • Review contracts—labelling someone a contractor doesn’t automatically exempt you
    • Seek advice or request a private ruling from the ATO if unclear
    • Consider an independent SG compliance review

Uncertain about your SG obligations? Don’t leave it to chance.

At Aero Accounting Group, we help business owners like you avoid costly superannuation pitfalls with clear advice, risk assessments, and proactive planning. Whether you’re engaging performers, contractors, or instructors, we’ll help you understand your obligations—and make sure you’re covered.

📲 Book a consultation today and gain peace of mind that your SG responsibilities are under control.

Need help?

Not sure if your current accountant is a good long-term fit? Contact us at Aero Accounting Group today and we’ll help you minimise your taxes and maximise your profits

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