Private ruling: Status of worker - superannuation guarantee
Date of advice: 31 July 2025
Published: 29 September 2025
Date scheme commenced: XX XX 2024

Ruling: Q1: Is the Worker an employee of the Applicant under the expanded definition in subsection 12(3) of the Superannuation Guarantee (Administration) Act 1992 (SGAA)? | A1: No.

Relevant facts and circumstances: The Applicant is a company. The Applicant improves the way the health system in their local region by: • Information related to types of services provided by Applicant. The Applicant uses a program called XXX. It is designed to be used at the point of care by clinicians. The Worker was engaged by the Applicant as a Service Provider to work to plan, adapt, develop and review, as well as provide clinical advice for the Applicants' XXX program. These services were capped for the Applicant to a maximum of XX hours per month for the period of the contract. The Applicant signed a Services Agreement with the Worker on XX XXX 20XX with the period from XX XX 20XX to XX XX 20XX, with the following relevant clauses and schedule: Supply of the Service The Contractor must perform the Services for XXX set out Schedule 1A. Fees The Contractor complying with this Agreement, XX, must pay the Fees to the Contractor for Services properly rendered. Invoices The Contractor must invoice XX for the Fees in accordance with the relevant Schedule. General The Contractor must not, subcontract, assign, in whole or in part, or novate the Contractor's rights and obligations under this Agreement without the prior written consent of XX. Schedule 1 Service specifications The Service Provider will work to plan, adapt, develop and review pathways, as well as provide clinical advice for XX program. Provide a valid Tax Invoice for the previous month's work Submit a valid Tax Invoice via the XX Supplier Portal by the Xth of each month, for the previous month's work. Schedule 2 Fees The total cost for the 20XX-20XX financial year is $XX. This equates to XX hours per month for XX months. The Applicant provided a copy of an invoice from the Worker dated XX XX 2025, which showed they are paid an hourly rate of $XX.

Relevant legislative provisions: Superannuation Guarantee Administrations Act 1992 subsection 12(3) Other References | The Taxation Ruling TR 2023/4 Income Tax and Superannuation guarantee: who is an employee ?

Reasons for decision: Summary: The Worker is not considered an employee of the Company for the purposes of SGAA under the extended definition set out in subsection 12(3) of the SGAA. The Company therefore does not have an obligation to pay superannuation contributions on behalf of the Worker. | Detailed Reasoning - Detailed reasoning: The SGAA requires that an employer must provide the required minimum level of superannuation support for its employees (unless the employees are exempt employees) or pay the Superannuation Guarantee Charge (SGC). Subsection 12(3) of the SGAA was intended to extend the scope of superannuation beyond traditional employment relationships to take into account some independent contractors who principally provide their own labour to meet obligations under a contract. The Taxation Ruling TR 2023/4 Income Tax and Superannuation guarantee: who is an employee ? provides guidance on the meaning of employee under section 12 of SGAA. For a worker to be an employee under subsection 12(3) of the SGAA, three elements must be satisfied: • there must be a contract (written or otherwise) • which is wholly or principally for the labour of a person, and • that person works under that contract. For the purpose of determining if a contract is wholly or principally for the labour of a person, it is useful to identify whether the terms of the contractual relationship indicate that: • the individual is remunerated (either wholly or principally) for their personal labour and skills • the individual must perform the contractual work personally (that is, where there is no right to delegate, or only a limited right), and • the individual is not contracted to achieve a result. | Detailed Reasoning - First element - must be a contract: Paragraph 96 of TR 2023/4 explains what a contract is: 96. This first element of subsection 12(3) (that is, that there is a contract) requires: ....a bilateral exchange of promises of labour and payment between two sides of the contract. On one side of the contract, a promise to provide labour and on the other side of the contract, a promise to make payment. This case, the Worker signed a contract with the Applicant on XX XX 2024 as a service provider to work to plan, adapt, develop and review pathways, as well as provide clinical advice for the Applicant program. The first element under subsection 12(3) of SGAA is satisfied. | Detailed Reasoning - Second element - Wholly or principally for the person's labour: The words 'wholly' and 'principally' take on their ordinary meaning. The Macquarie Dictionary defines the word 'wholly' to mean 'entirely; totally; altogether; quite.' To the extent that a contract is partly for labour and partly for something else (for example, the supply of goods, materials or hire of plant or machinery), it will only meet the provision if it is 'principally' for labour. The word 'principally' is defined by the Macquarie Dictionary as 'chiefly; mainly. A person's labour can include mental and artistic effort, as well as physical toll. When a contract contains a right which allows a worker to delegate, subcontract or assign their work to another, whether subject to the consent of the engaging entity or not, the contract will not be wholly or principally for the labour of the worker. Paragraph 59 and 60 of TR 2023/4 outlines what a 'result' contract is: 59. Where the substance of a contract is to achieve a specified result, there is a strong (but not conclusive) indication that the contract is one for services. The reference to a 'result' in this context is the performance of a service by one party for another where the first-mentioned party is free to employ their own means (such as third-party labour, plant, and equipment) to achieve the contractually specified outcome. Satisfactory completion of the specified services is the 'result' for which the parties have bargained. 60. The way in which a worker is remunerated for their services, and the process through which the parties determine this remuneration, can help to identify whether a worker is being engaged to serve in an engaging entity's business or has merely contracted with that business to produce a specified result. The Worker is remunerated for their labour as a service provider to work to plan, adapt, develop and review pathways, as well as provide clinical advice for XXX program that is run by the Applicant. The Worker is paid an hourly rate, this indicates that the Worker is not contracted for a result. Paragraphs 54-57 of TR 2023/4 outline the ability to delegate, subcontract of assign work as follows: 55. Where a worker has an entirely unfettered right to delegate, subcontract or assign their work to others, in the absence of countervailing considerations, the existence of this right will be a very strong indicator against the worker being an employee. Where the right is fettered, the degree of inconsistency between it and the other terms of the contractual relationship between the parties will reveal the degree to which the fettered right to delegate, subcontract or assign tends against a finding of employment. 56. As such a right to delegate, subcontract or assign work which is: • not limited in scope (that is, the worker can delegate, subcontract, or assign the entirety of their work to another, as opposed to only discrete tasks) • not a sham, and • legally capable of exercise will indicate a worker is not an employee of the engaging entity. Whether the worker is, however, an independent contractor will depend upon an examination of the totality of the legal rights and obligations between the parties. 57. The concept of delegating, subcontracting and assigning work in this context should not be confused with other arrangements in which a different person might perform work in the worker's place. An employee may frequently delegate tasks to other employees, particularly where the employee is performing a supervisory or managerial role. However, this delegation exercised is fundamentally different to true delegation exercised by a contractor outlined in this Ruling. There is a right of delegation in the Agreement which is not limited in scope, not a sham and legally capable of exercise. Based on the above, the contract is not wholly and principally for the Worker's labour and the second element under subsection 12(3) of the SGAA is not satisfied. | Detailed Reasoning - Third element - Person works under the contract: Paragraphs 99 and 100 of TR 2023/4 provides: 99. The concept of 'works under a contract' is one of personal exertion and personal effort. 100. Subsection 12(3) only applies where the party providing the labour (that is, the worker) is a natural person who was a party to the contract in his or her individual capacity and not in any other capacity such as a trustee of a personal services trust or a partner in a partnership. In this case, the Worker has contracted with the Applicant in their individual capacity and not in any other capacity. Therefore, the third element is satisfied under subsection 12(3) of SGAA. | Detailed Reasoning - Conclusion as to subsection 12(3) of the SGAA: We find that the Worker is not an employee under subsection 12(3) of the SGAA as all three elements are not satisfied. Therefore the Applicant does not have an obligation to pay superannuation guarantee.

This advice applies for the following periods: Quarter ending September 20XX | Quarter ending December 20XX | Quarter ending March 20XX