Superannuation Guarantee (SG) obligations are broader than many employers realise. They don’t just apply to traditional employees — they can also cover directors, contractors, performers, gym instructors, and sportspeople.
Why it Matters
If you’re a business owner or employer and you’re unsure whether SG applies to someone working for you, it’s vital to clarify. You can:
- Do an internal assessment
- Consult an employment lawyer
- Apply for a private ruling from the ATO
Important: The ATO can go back as far as needed to recover unpaid SG — there’s no time limit. The SG system is designed to ensure that all eligible workers receive their super contributions, and directors may be personally liable under penalty provisions.
Who Doesn’t Need to Be Paid SG?
SG is not required for:
- Employees under 18 years old working less than 30 hours a week
- Domestic workers working less than 30 hours a week
- Non-residents working outside Australia
- Employees temporarily in Australia covered by bilateral agreements
- Certain foreign executives with specific visa types
Generally, SG is not payable if you’re contracting with a company, trust or partnership.
If an Australian employee works overseas in a country with a social security agreement (e.g. the US), SG should still be paid. A certificate of coverage can prevent double payments.
SG’s Expanded Definition of “Employee”
Under Section 12 of the SG Act, the following are treated as employees for SG purposes:
- Company directors paid for their duties
- Contractors paid mainly for their labour
- Certain government-contracted workers
- People paid to perform or support music, acting, dancing, sports, or media (film, TV, etc.)
Are Contractors Entitled to SG?
Yes, often they are — even if they have an ABN. SG may apply if:
- More than 50% of the contract is for their labour
- They provide personal services (not tied to a specific result)
- The work can’t be delegated
Even if the contract says the contractor is responsible for their own super, the ATO focuses on the actual working relationship.
A contract that’s “wholly or principally for the labour of the person” means SG must be paid.
In some cases, like where a contractor uses a substantial asset (e.g. a truck), that could suggest it’s not just for labour — but this depends on the facts.
Are Directors Paid SG?
Yes — directors who are paid for their duties must receive SG contributions.
SG and the Entertainment Industry
Artists and performers operating through a company, trust, or partnership are not generally considered employees for SG purposes.
However, individuals who are paid to:
- Perform in any music, dance, sport, entertainment, or promotional activity
- Provide services in connection with those activities
- Work on related media (e.g. film, tape, disc, TV)
…are likely deemed employees under Section 12(8) of the SG rules.
Example: Who Pays SG for a Performer?
- A festival that hires a sole trader directly = the festival pays SG.
- A sole trader who hires other performers = the sole trader pays SG for them.
- A booking agency that pays performers = the agency pays SG.
- If the agency only charges a booking fee and the festival pays performers directly = the festival pays SG.
Understanding who the employer is for SG purposes is crucial.
What About Those “In Connection With” Services?
Support roles — like producers, videographers, editors — may also be considered employees under SG rules if they’re connected to a performance and meet the working criteria.
Are Gym Instructors Sportspeople?
Maybe. It depends on the nature of their work arrangement.
Example: Gym Instructor as Sole Trader with an ABN
- Paid per class/session
- Uses the gym’s equipment and systems
- Wears the gym’s uniform
- Trained by the gym
- Contract states they’re an independent contractor
Despite the contract, if the instructor:
- Works mainly for their labour
- Builds the gym’s business, not their own
- Can’t delegate the job
Then they are likely an employee for SG purposes — and the gym may be liable for SG backpay from the start of the relationship.
Key Takeaway
If you’re unsure whether SG applies to someone — especially contractors, performers, or gym staff — it’s best to confirm. If they’re deemed an employee under SG rules, you must pay super, even if the contract says otherwise.
Concerned about your workplace SG liability? Please contact us for an initial interview.
