Payday Super and independent contractors

The ATO is reminding businesses that Payday Super changes when super contributions must be paid, not who is entitled to receive them.

Businesses generally need to pay super where they engage an independent contractor mainly for their labour, personal effort, skills or time.

This can apply even if the contractor:

• has an ABN;

• invoices the business for their work; or

• is described as a contractor in a written agreement.

Where an independent contractor is entitled to super, the contribution must be paid for each payday and reach their super fund within seven business days after payday.

It is not mandatory to report payments made to independent contractors through Single Touch Payroll ('STP').  However, if a business reports them voluntarily, it must meet the STP reporting requirements, including reporting qualifying earnings and super liability information.

If you have any questions in relation to the matters discussed in this blog, please get in touch with us.