First Super Super Contractors Fact Sheet_Final_Aug2015
HOW DOES THE SUPERANNUATION GUARANTEE(SG)
APPLY TO CONTRACT WORKERS?
Generally, 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 SG purposes.
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.
If your contractors are employees, for the purposes
of the SG, you must provide the minimum level of
super contributions.
The minimum super amount you have to pay is 9.5%
of each eligible employee™s earnings base.
Your contribution should be calculated only on the
labour
component of the contract.
WHAT IS A CONTRACT FOR LABOUR?
A contract for labour can be made either verbally or
in writing.
A contract may be considered wholly or principally for
labour, if the contractor:
>
is remunerated wholly or principally for their personal
labour and skills;
>
must perform the contract work personally; and
>
is paid by reference to hours worked rather than
completion of the contract.
If you make a contract with someone other than the
person who will actually be providing the labour, there
is no employer-employee relationship.
The following two situations are examples of when the
contract is
not
for the labour of the individual:
>
if you make a contract with a company, trust or a
partnership; or
>
if the person you have the contract with is able to hire
other people to perform the work, even if the person
ends up performing the work themselves.
How do I work out the labour part of the contract?
If the values of the various parts of the contract are
not detailed in the contract, the Australian Taxation Of˜ce
(ATO) will accept their market values and will take the
normal industry practices into consideration.
If the labour component of a contract cannot be worked
out you can use a reasonable market value of the labour
component of the contact to represent the salary and wages
of an employee.
WHAT HAPPENS IF YOU DON™T MEET THE SG
REQUIREMENTS?
If you don™t pay enough super for your eligible contractors,
or if you miss the payment cut-off dates, you will have to
pay the
‚superannuation guarantee charge™
.
If you require any further information:
Refer to the guide to superannuation for employers
on the ATO website.
SUPER FOR CONTRACTORS
SUPER FOR CONTRACTORS FACT SHEET˜ PAGE2
Example 1:
Harry™s Hobby Shop makes a contract with Pete™s
Paints to paint their new shop. The entire job is
completed by one painter from Pete™s Paints.
This painter is not an employee of Harry™s Hobby Shop
for SG purposes. The contract is between Harry™s
Hobby Shop and Pete™s Paints.
Harry™s Hobby Shop has no control over which
particular individuals do the work and paid Pete™s
Paints to achieve a result. Pete™s Paints may have
SG obligations for the painter.
Example 2:
David™s Caravan Park has a contract with Amanda,
a freelance administrative assistant, to answer
phones and do administrative work for 15 hours per
week. The contract speci˜es that Amanda herself
must perform the work. Amanda has an ABN and
invoices David weekly for the hours she works.
Amanda is considered David™s employee for SG
purposes because:
>
their contract is wholly for the labour and skills
Amanda provides as an administrative assistant;
>
she performs the work personally; and
>
she is paid according to the number of hours
worked.
S ource: ASIC Money smart
WANT TO KNOW MORE?
WE™RE HERE TO HELP.
Please contact our Service Centre today.
Call
1300 360 988
mail
@
firstsuper.com.au
Website
firstsuper.com.au
PUTTING MEMBERS FIRST
Important information:
The material contained in this bulletin is accurate and reliable as at August 2015.
This information is of a general nature only and does not take into account your personal circumstances
or situation. We recommend that you seek quali˜ed ˜nancial advice before making any investment decision.
The bulletin is provided by First Super Pty Ltd ABN 42 053 498 472, AFSL No. 223988, as the Trustee of
First Super ABN 56 286 625 181. If you intend to invest in or continue to hold this product you should obtain
and consider a copy of the Product Disclosure Statement which is available by phoning 1300 360 988.
First Super Pty Ltd
ABN 42 053 498 472
AFS Licence No: 223988
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First Super Pty Ltd as Trustee
of First Super ABN 56 286 625 181