Private ruling: Superannuation Guarantee
Published: February 2014

Ruling: Whether the proposed arrangement gives rise to a liability under section 12 of the Superannuation Guarantee (Administration) Act 1992 (SGAA), | Facts | The principal is an entity with a board. | The current chair of the board proposes that the current arrangement be varied whereby the chair's private company be contracted to provide the board chair services to the primary entity. | All fees will be paid by the primary entity to the private company.


Relevant legislative provisions: Superannuation Guarantee Administration Act 1992 subsection 12(1) ATOview documents | Superannuation Guarantee Ruling SGR 2005/1 Superannuation guarantee: who is an employee? (SGR 2005/1)

Reasons for decision: Summary: The SGAA states 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). Paragraph 13 of the Superannuation Guarantee Ruling SGR 2005/1 Superannuation guarantee: who is an employee? (SGR 2005/1) provides an explanation that addresses the facts and evidence as provided and concludes: Where an individual performs work for another party through an entity such as a company or trust, there is no employer-employee relationship between the individual and the other party for the purposes of the SGAA, either at common law or under the extended definition of employee. This is because the company or trust (not the individual) has entered into an agreement rather than the individual. However, the individual may be the employee of the intermediary company or trust, depending on the terms of the arrangement. The proposed arrangement does not give rise to a liability under section 12 of the SGAA as there is no employer-employee relationship.