Subcontractor Superannuation
Did you know you may be entitled to superannuation contributions even if you are an individual sub-contractor?
Where you provided personal labour or skills to a business on an ongoing basis, you may be entitled to receive super on top of your quoted or agreed price.
The ATO has stated that where a contractor is paid wholly or principally (mostly) for their labour, they are considered an employee for super purposes.
This means that if you are paid whole or principally for your labour and skill, and your paid for time worked, rather than for an achieved result, you are likely deemed an employee for super purposes and are entitled to superannuation contributions of 9.5% of the dollar value of the time worked.
It is illegal under the Superannuation Guarantee (Administration) Act 1992 (Cth) for your employer to pay the 9.5% super directly to you or as part of your agreed payment. Under the Super Guarantee laws the super payment needs to be paid directly to your super fund.
You should ensure that you provided your super fund details directly to the employer within 28 days of work commencing.
You can download the super Standard choice form here (automatic download), or you can download a copy from your super fund portal. It is also a good idea to have the fund name, ABN and your member number on you invoice.
If you think you may be entitled to super or are unsure if you are considered an employee for super purposes, please visit the “Employee/contractor decision tool” page on the ATO website and check if you are eligible.
If you are eligible, you should immediately contact your employer and advise them of this information as there are significant penalties a business will face if they are failing to comply with both the Fairwork Act and the ATO directive.
For further information please visit the following websites, or alternatively, contact us here
https://www.ato.gov.au/individuals/super/getting-your-super-started/contractors/
https://www.fairwork.gov.au/find-help-for/independent-contractors
https://www.ato.gov.au/Calculators-and-tools/Employee-or-contractor/
https://www.ato.gov.au/Calculators-and-tools/Host/?anchor=ECDTSGET&anchor=ECDTSGET/questions/ECDT#ECDTSGET/questions/ECDT
