With Payday Super approaching fast, now’s the time to look at how you pay super for independent contractors.
While Payday Super doesn’t change who is eligible for super as the existing rules on eligibility remain the same, what does change is when you must pay super.
If you’re currently required to pay super for an independent contractor, you’ll continue to do so under Payday Super.
Understanding when super applies
Some independent contractors are treated as employees for super purposes under what’s known as the extended definition of employee.
You’ll generally need to pay super for a contractor if they’re paid mainly for their labour. This can apply even if they:
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have an ABN
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invoice you for their work
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are described as a contractor in a written agreement.
If you’re paying a contractor primarily for their personal effort, skills or time, rather than to deliver a specific result, super is likely required.
These rules currently apply and are not changing under Payday Super.
Timing of super payments
There’s no separate timing or special treatment for independent contractors.
If you’re required to pay super for an independent contractor now, you’ll continue to do so from 1 July 2026. From that date, super for eligible independent contractors must:
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be paid for each payday, and
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reach the super fund within 7 business days after payday.
If paying them by invoice, the payday is the date the invoice is paid. This means super must reach the fund within 7 business days of paying the invoice.
Reporting for contractors
If you’re not currently reporting for contractors in single touch payroll (STP), you do not need to change this under payday super.
However, if you do report contractors under STP, you will need to ensure that you report both qualifying earnings and super liability for them from 1 July 2026.
Act now by reviewing your contractor arrangements and super payment processes and confirm those who are eligible for super.
Source: ATO
Reproduced with the permission of the Australian Tax Office. This article was originally published on https://www.ato.gov.au/businesses-and-organisations/small-business-newsroom/contractors-when-to-pay-super-under-payday-super
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