In hospitality, events, marketing, and media, booking talent often feels straightforward: you agree on a fee, they provide an ABN invoice, and payment is processed. However, treating every creative or sportsperson as a standard independent contractor is one of the easiest ways for small businesses to accidentally trigger ATO penalties.
The Australian Taxation Office (ATO) recently issued updated guidance reminding businesses that sportspeople, musicians, performers, and film makers are often classified as “employees” for Superannuation Guarantee (SG) purposes, regardless of whether they hold an ABN or call themselves a contractor.
Here is the breakdown of what this ruling means and how to safeguard your payroll.
1. The Extended Definition of an “Employee”
Under Section 12(8) of the SG Act, the definition of an employee is significantly broader than general workplace law.
– The News: If you are legally liable to pay an individual to perform, present, or participate in music, dance, sport, entertainment, or promotional activities (including influencers), they may be deemed employees for super purposes. This also covers individuals providing services in film, broadcasting, or audio recording.
– What it Means: Having an ABN, issuing a tax invoice, or working a one-off single gig does not exempt you from paying super if you engage the performer as an individual/sole trader.
– The EMspire Tip: Look behind the invoice. If the contract is with an individual sole trader rather than an incorporated entity (like a Pty Ltd company or trust), superannuation is almost certainly payable on their labour component.
2. Support Crew and Production Roles Count Too
The super net does not stop at the talent on stage or in front of the camera.
– The News: Super obligations extend to individuals hired to deliver support services required for a performance, broadcast, or production to occur.
– Who is Covered: This includes sound engineers, lighting technicians, camera operators, choreographers, stagehands, and event referees hired as sole traders.
– The Benefit & Clarity: You do not have to guess which portion attracts super. The ATO confirms that SG applies only to the labour component. It does not apply to bona fide expenses like equipment hire, studio hire, or travel costs itemised on the invoice.
3. Intermediaries, Revenue Sharing, and Exceptions
Not every creative booking triggers superannuation, but the structure of the deal dictates who carries the liability.
– The Exceptions: You are generally exempt from paying super if the engagement is wholly private/domestic (e.g., hiring a musician for a private wedding) and under 30 hours per week, or if the individual is under 18 working under 30 hours per week.
– Booking Agencies: If you engage talent through a booking agency, the party legally responsible for paying the performer holds the super obligation. If the agency contracts and pays the artist directly, the obligation sits with them; if the agency merely acts as an introducing venue agent, the liability may stay with you.
– The EMspire Tip: If performers operate under a door-split or revenue-sharing arrangement, establish upfront in writing how gross takings are distributed and ensure your contracts explicitly clarify whether agreed performance fees are inclusive or exclusive of super guarantee contributions.
A Heads-Up for Payday Super
With Payday Super rules requiring superannuation contributions to land in employee funds within days of payday, missing contractor super obligations creates compounding shortfalls and Super Guarantee Charge (SGC) liabilities. Collecting nominated super fund details when a contractor is engaged is now essential.
The team at EMspire Advisory are trusted, qualified Chartered Accountants, tax agents, and small business accountants. We work closely with our clients to achieve the best possible outcomes. To find out more, please contact us!
Please note that this information is not specific and is general in nature and cannot be relied on as advice. Please contact us for advice specific to you and your circumstances.