Private ruling: Superannuation guarantee
Date of advice: 24 April 2026
Published: 13 July 2026
Date scheme commenced: 1 January 20xx

Ruling: Q1: Is the Worker an employee of the Payer under the expanded definition in subsection 12(3) of the Superannuation Guarantee (Administration) Act 1992 (SGAA)? | A1: Yes.

Relevant facts and circumstances: The Payer is a not-for-profit entity and registered charity engaged in delivering community-based mental health and wellbeing programs. The Payer has a Facilities Agreement with the Worker and School to procure the delivery of the Project by the Worker. The Payer has entered into a written Agreement with the Worker to deliver the Project to participants at designated premises. The Worker is required to comply with all reasonable and lawful requirements and written directions of the Payer and School in relation to the delivery of the Project. The Agreement allows for the appointment of a substitute or additional worker only where the Payer and the Worker jointly agree, and only if the substitute or additional worker executes a document binding them to perform the Worker's duties under the Agreement. The Worker is described in the Agreement as an independent contractor and does not have authority to incur obligations on behalf of the Payer without prior written approval of the Payer. The Worker is required to maintain all necessary registrations, qualifications, licences, and clearances relevant to the delivery of the Project, including professional registration and statutory clearances. The Worker is required to deliver the Project with due care, skill and diligence in accordance with professional standards, clinical judgement, School operational requirements, and Payer's governance and reporting requirements. The Worker is required to perform duties including counselling services, program delivery, documentation, reporting, and participation in evaluation and review processes. The Worker is remunerated by hourly rate. The remuneration is calculated by the total number of hours worked by the Worker during each month, multiplied by an agreed hourly rate. The total amount paid by the Payer is subject to an amount of $xxx,xxx for the delivery of the Project. The Worker is required to keep records of hours worked, services delivered, participant engagement, and outcomes, and to provide reports and acquittals in the format required by the Payer. The Payer is solely responsible for the payment of their own taxes, statutory payments and GST (if applicable). All intellectual property in the Project, including intellectual property created during the term, remains the property of the Worker, with the Payer granted a limited licence for project purposes. The Worker is required to maintain professional indemnity and public liability insurance and indemnifies the Payer for losses arising from failure to maintain required insurances. Either party may terminate the Agreement without notice, and the Payer has rights to terminate immediately in specified circumstances, including failure to perform services to the required standard. The Agreement expressly states that no partnership, employer-employee relationship, or agency relationship is intended or created between the Payer and the Worker.

Relevant legislative provisions: Superannuation Guarantee (Administration) Act 1992 subsection 12(3) Taxation Ruling TR 2023/4

Reasons for decision: 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. 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: a. there must be a contract (written or otherwise); b. which is wholly or principally for the labour of a person; and c. 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: a. the individual is remunerated (either wholly or principally) for their personal labour and skills b. the individual must perform the contractual work personally (that is, where there is no right to delegate, or only a limited right), and c. the individual is not contracted to achieve a result. | Detailed Reasoning - First element - existence of a contract: Paragraph 96 of TR 2023/4 explains what a contract is. A contract is ... 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. The Payer and the Worker executed a written Agreement for the provision of services associated with delivery of the Project. The contract is detailed, includes defined obligations, payment terms, termination provisions and reporting requirements for the Worker. The Payer makes payment to the Worker after they deliver the services. The presence of offer, acceptance and consideration is evident. The contract is clearly intended to be legally binding, signed as a deed, and contains comprehensive governance and performance clauses. | Detailed Reasoning - Conclusion: A contract exists for the purposes of subsection 12(3) of SGAA. | Detailed Reasoning - Second element - Person works under the contract: The concept of 'works under a contract' requires personal exertion and personal effort. Subsection 12(3) of the SGAA only applies where the worker is a natural person who is a party to the contract in their capacity as an individual. Under the Agreement, the Worker personally provides counselling services and performs associated duties, including program delivery, documentation, reporting, and participation in evaluation and review processes. Accordingly, the Worker individually performs work and works under the contract for the purposes of subsection 12(3) of SGAA. | Detailed Reasoning - Conclusion: The Worker works under the contract. | Detailed Reasoning - Third element - Wholly or Principally for the Person's Labour: A contract is wholly or principally for labour of a person is determined by reference to the terms of the contract. The word 'wholly' and principally' means 'entirely' "chiefly' or 'mainly'. Courts and the ATO have clarified when a contract is not wholly or principally for labour where: • The worker is free to delegate or subcontract work. • The contract is for a result rather than for labour. • The contract is principally for something other than labour (e.g., business service delivery, provision of equipment, project outcomes). Delegation/Subcontracting Rights The Agreement allows for the possibility of a substitute or additional worker; however, this may only occur by joint agreement between the Payer and the Worker, and only where the substitute enters into a binding arrangement to perform the Worker's duties. This means that the Worker cannot freely delegate another person to perform the contracted services as part of the operation of their business. Accordingly, the contractual arrangement does not permit the Worker to discharge their obligations through the unfettered engagement of employees or subcontractors and remains the one in which the performance of personal labour is required. Results contract A contract is not wholly or principally for the labour of a worker when the contract is properly characterised as being for the provision of a result. The Worker records hours worked and invoices the Payer based on those hours. The services performed align with the work contemplated by the Agreement. Under the Agreement, the Worker is paid a monthly amount calculated by reference to: • the total number of hours worked by the Worker; and • the Worker's hourly rate. This method of remuneration is time-based , rather than outcome-based. Payment is made for hours worked, not for the completion of a defined result or deliverable. The time-based remuneration calculated by reference to hours worked is a strong indicator that the contract is for the individual's personal labour and skills. Principally for something other than on labour Paragraphs 108, 109 and 110 of TR 2023/4 points out how we assess a contract is principally for a benefit other than the labour of the worker. 108. To the extent that a contract is partly for labour and partly for something else, for example, the hire of plant or machinery, whether the contract is principally for the worker's labour will be a question of fact. This involves an evaluation of the terms of the relevant contract or contracts, and is assessed by reference to the benefit or benefits that the engaging entity receives out of the bargain. 109. Where the provision of the contracted service requires the use of a substantial capital asset, this is a factor supporting the characterisation of the contract as not being wholly or principally for labour. 110. In certain cases, where a contract is properly characterised, it may be that the benefit received by the engaging entity under the contract is a single integrated benefit, of which labour is just one component, rather than a number of separate benefits. For example, in ZG Operations Remittal, Perram and Anderson JJ held that the benefit the engaging entity, ZG Operations, received under the contract was a single integrated benefit being a delivery service, and not separate benefits of driving labour and the use of a truck. The Agreement requires the Worker to deliver services like counselling, to participants in the designated premises. The benefit received by the Worker as an engaging entity is a single integrated benefit under the Agreement and the labour is only component in the Agreement. | Detailed Reasoning - Conclusion on labour requirement: Having regard to the totality of the contractual relationship: Accordingly, the contract is wholly or principally for the personal labour of the Worker . | Detailed Reasoning - Conclusion: When the Agreement is considered, the contractual relationship: • is wholly or principally for the personal labour of the Worker • does not provide an unfettered right to delegate, with any substitution requiring the agreement of the Payer • is not results-based, with remuneration calculated by reference to hours worked • falls within subsection 12(3) of the SGAA, having regard to ATO guidance and relevant case law. Therefore, the Payer is required to make superannuation guarantee contributions in relation to payments made to the Worker under the service agreement.

the Worker is remunerated on a time-based basis for hours worked | the services are not results-based | the Worker is required, in substance, to perform the work personally; and | any right of substitution is limited and subject to the Payer's agreement.