Who’s Really Entitled to Super? What I Learned Helping an NFP Sort Out Its Superannuation Guarantee Obligations

ByLaurarobertson

Most small associations and community organisations assume that if someone has an ABN and sends an invoice, superannuation isn’t their problem. It’s one of the most common — and most costly — misunderstandings in the not-for-profit sector, and it comes up constantly wherever organisations engage performers, contractors, or casual help: community associations booking bands for a fundraiser, sporting clubs engaging coaches, arts organisations hiring presenters.

I recently worked through this exact issue with a not-for-profit association that regularly hires bands to perform at its events. The bands typically invoice through one member’s sole trader ABN — a completely standard, everyday arrangement, and one that turns out to sit right at the intersection of several superannuation guarantee (SG) rules that most organisations have never had reason to think about. Here’s what I found, and what any organisation engaging performers or contractors should take from it.

Who is actually entitled to super guarantee?

The starting point is that “employee” for super guarantee purposes is a much wider concept than most people expect. The Superannuation Guarantee (Administration) Act 1992 (SGAA) defines employee in section 12, and that definition works in two layers.

The first layer is the ordinary, common-law meaning of employee — the traditional test courts have applied for decades, recently restated by the High Court in Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1. Where there’s a written contract, the label the parties give it isn’t decisive — what matters is the rights and obligations the contract actually creates.

The second layer is where most of the surprises live: subsections 12(2) to 12(11) extend the ordinary meaning of employee to catch people who wouldn’t be common-law employees at all. Three extensions matter most in practice:

  • Contracts wholly or principally for labour (s12(3)). If a person works under a contract that is mainly about supplying their own labour — rather than, say, a business supplying a finished product or the services of multiple staff — that person is treated as an employee of the other party, regardless of what the contract calls them.
  • Performers, sportspeople and similar (s12(8)). Anyone paid to perform or present music, dance, sport, entertainment or a similar activity involving artistic, intellectual, musical or physical skill is deemed an employee of whoever is liable to pay them — full stop. Critically, this rule doesn’t depend on there being a contract at all, and it doesn’t care whether the performer holds an ABN, is labelled a contractor, or genuinely operates like one for every other purpose. It’s a much blunter, more literal rule than the ordinary contractor test, and it’s the one that trips up event organisers most often. The ATO’s own guidance on super for sportspeople, performers, film makers and related activities confirms just how broadly this is applied.
  • Company office-holders (s12(2)). Company directors and similar office-holders are employees of the company in relation to those duties, again regardless of any contractor arrangement.

When is SG genuinely not payable?

The flip side is just as important, because it’s easy to over-correct and assume every payment now attracts super. SG is genuinely not payable in a number of well-defined situations:

  • Real independent contractors, running their own business. Someone who can delegate the work, uses their own equipment, bears commercial risk, and works for multiple clients is typically a genuine contractor under the ordinary common-law test — provided none of the extended rules above (particularly s12(3) or s12(8)) independently apply to them. The ATO sets out its own view in Super for independent contractors.
  • Payments to a genuine company, trust or partnership, rather than to the individual who does the work. Where the contracting party is a separate legal entity — not just an individual’s ABN — neither the organisation nor any intermediary is contracting directly with the worker, which can take the arrangement outside the extended definitions altogether. This only works if the entity is real and operating, not a label placed over what is, in substance, an individual performing personally.
  • Workers under 18 working 30 hours or less in a week. This exemption is based on actual hours worked in that week — it can’t be averaged over a longer pay period.
  • Genuinely domestic or private work (for example, a private nanny or carer) for 30 hours or less per week.
  • A handful of narrower carve-outs: non-resident employees working entirely outside Australia, armed forces reservists, foreign executives on certain visa classes, employees covered by a bilateral super agreement who hold a certificate of coverage, and high-income earners with multiple employers who’ve obtained a super guarantee employer shortfall exemption certificate to opt out of SG from a particular employer. None of these are likely to come up in a typical band-booking or contractor scenario, but they’re part of the full picture.

One threshold that used to matter no longer does: the old $450-a-month minimum earnings exemption was abolished from 1 July 2022. There is now no minimum fee below which SG doesn’t apply — a one-off $200 gig fee attracts the same obligation, proportionally, as a $2,000 one, calculated at the current SG rate of 12% of qualifying earnings.

And the timing has changed too — this is the one to watch. Since 1 July 2026, Payday Super means SG can no longer be left to accumulate and settled quarterly. It must now be paid into the employee’s (or deemed employee’s) super fund on payday, and generally needs to be received by the fund — with enough information to allocate it — within 7 business days of pay. For an organisation that only works out after the fact that a gig fee attracted SG, that’s a much tighter window to put right than it used to be, and the ATO’s shortfall and penalty regime now runs on that shorter timeframe rather than the old quarterly one.

The legislation and guidance behind all of this

None of the above is guesswork — it’s grounded in a specific, layered set of authority:

  • Section 12 of the SGAA — the core definitions discussed above.
  • Taxation Ruling TR 2023/4, the ATO’s ruling on the ordinary and extended meaning of “employee” following the High Court’s Personnel Contracting decision, which shifted the test firmly onto the legal rights and obligations in the contract rather than how the parties describe it or how the relationship plays out in practice.
  • Draft Superannuation Guarantee Ruling SGR 2026/D1, which deals specifically with tripartite and intermediary arrangements — where a worker is engaged through, or paid via, a third party rather than directly by the end user. This ruling (still in draft at the time of writing, and due to replace the long-standing SGR 2005/2) sets out how to work out who the real “employer” is when more than one contract is potentially in play, and draws on a consistent line of case law: Odco, Drake, Swift Placements, and Damevski v Giudice among them. The consistent theme across every one of these cases is that labels — “employment agency,” “principal contractor,” “independent contractor” — are never decisive. What matters is who is legally liable to pay whom, and whom each party could actually sue if something went wrong.
  • The Payday Super reforms, which amended the SGAA’s payment machinery and took effect from 1 July 2026, changing when SG must reach a fund (see below) without changing who counts as an employee in the first place — the section 12 analysis above still does that work.

How this plays out in real life: the band with one ABN

Here’s where theory meets the community hall stage. A typical booking looked like this: the association engages “the band” for an event, and one member — the front person — sends the invoice under their own sole trader ABN. On paper, it looks like a simple contractor payment.

It isn’t, for two reasons that surprised the association’s committee.

First, the ABN is irrelevant to the analysis. A sole trader ABN isn’t a separate legal entity — it’s just that individual, trading under a registered number. It doesn’t interpose anything between the association and the performer the way a genuine company or trust could. Because the performer is being paid to perform music, section 12(8) applies directly to them regardless of the ABN, the invoice, or any contractor labelling. One useful nuance here: SG is only calculated on the labour or performance component of what’s paid, not the whole invoice — if a band’s fee bundles in equipment hire, travel, or accommodation, only the portion that’s genuinely payment for the performance itself attracts SG.

Second — and this is the part that’s easy to miss — the ABN invoice doesn’t automatically resolve who’s liable for the other band members either. The deeming rule asks who is liable to pay for each individual’s performance. If, in substance, the association is still the party liable to pay every band member (with the front person’s account simply used as a convenient place to receive and split the money), the association’s SG exposure runs to the whole band, not just the person who happened to raise the invoice.

The only way to genuinely shift that exposure is to change the substance of the arrangement, not just the paperwork: engaging the front person as the genuine principal supplier of the whole band’s performance, with the front person independently and unconditionally liable to pay (and meet the SG obligations for) the other members — documented through a proper supplier agreement, with each band member’s informed consent, and with records kept to prove it actually operates that way. Even then, the association’s own SG obligation to the front person personally, for their own performance, doesn’t disappear — that can’t be contracted away.

The practical takeaway

For any organisation regularly engaging performers, sole traders, or casual contractors, four habits go a long way:

  • Don’t treat an ABN as an answer. It resolves PAYG withholding questions, not superannuation ones. Every engagement needs its own assessment against the ordinary and extended definitions in section 12.
  • Get the true liability structure in writing before the event, not after. If the intention is that one party is genuinely responsible for engaging and paying others, document it properly, get everyone’s informed acknowledgment, and keep records for at least five years.
  • Match the paperwork to what actually happens on the day. None of these structures hold up if, in practice, the organisation still deals directly with individual performers on pay or terms — substance beats form every time an arrangement is tested.
  • Work out SG liability before payday, not after. Under Payday Super, there’s no longer a quarterly buffer to sort out a mistake — build the assessment into your booking process itself, so it’s settled before the fee is paid, not discovered afterwards.

Getting this wrong doesn’t just mean back-paying super — under Payday Super’s tighter timeframes it also means the shortfall is more likely to trigger the SG charge and administrative penalties, plus a compliance history that follows the organisation into future ATO reviews. If your organisation regularly engages bands, performers, presenters, or contractors and you’re not sure where you stand, it’s worth a proper review before the next booking, not after.

Learn more from the ATO

Free resources

If your organisation engages bands, performers, or a “front person” arrangement like the one above, these templates are a practical starting point — customise the bracketed placeholders and have them reviewed for your own circumstances before use:

Download the templates

SG Payability Worksheet (Word)
Band Member Consent Form (Word)
Band Supplier Agreement (Word)

This article is general information based on the Superannuation Guarantee (Administration) Act 1992, TR 2023/4, the draft ruling SGR 2026/D1, and the Payday Super reforms in effect from 1 July 2026 (current at August 2026; the draft ruling is not yet finalised). It isn’t a substitute for advice on your organisation’s specific arrangements, and professional advice tailored to your circumstances is recommended before relying on it.

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