I went to the 'Superannuation in the Creative Industries' talk and walked out feeling well-informed yet frustrated.
The Australian Government enforced Payday Super from the 1st of July 2026, swapping out the quarterly super payments. I admit I never thought about it until my awesome mentor Bob Scott brought it to my attention at a recording gig! Previously, my only notion of super from other industry colleagues is,
If you're an independent contractor, you are responsible for your own super and you just incorporate it into your pricing.
WRONG!!!
I realised I have been missing out on my super entitlements as a freelance audio engineer and that I was classified as an employee for Super purposes all along.
Me, being the baby freelancer that I was back in 2023, took it for face value and did exactly that ever since – but then July arrived and with it came a slew of Instagram posts from musicians and the Australian Government’s principal arts investment and advisory body, Creative Workplaces, about this new legislation and how it's affecting our beloved industry.
That influx of information from various online and personal sources prompted me to look deeper into superannuation and how freelancers are affected.
Naturally, my partner and I ended up spending 4 hours going back and forth from ATO's website and chatting with Google Gemini to make sense of this information, most especially the pages on Super for independent contractors and Super for sportspeople, performers, film makers and related activities (This is the most relevant to music industry professionals). Here is a super checker tool we worked on, but please use at your own discretion:
As if my relationship to the music industry isn't already complicated, wrapping my head around compliance for this new legislation required more brain cells than I thought – yes, going to the Creative Workplaces talk was great, but any advice on the necessary steps needed to ensure compliance as a sole trader receiving and paying super to other sole traders was not straightforward!
What We Know
Let's start with what we know from the 1992 act. The ATO states:
If you pay independent contractors mainly for their labour, they are employees for superannuation guarantee (SG) purposes. You may need to pay super to a fund for them.
It doesn't matter if the independent contractor has an Australian business number (ABN).
Make super contributions for independent contractors if you pay them:
under a verbal or written contract that is mainly for their labour (more than half the dollar value of the contract is for their labour)
for their personal labour and skills (payment isn't dependent on achieving a specified result)
to perform the contract work (work cannot be delegated to someone else).
How I Approached Compliance
If you invoice your client/employer with your agreed fee + 12% super, do not make the mistake of having them deposit that combined amount into you bank account. Super payments need to be paid into you super account using SuperStream compliant services. Quoting the ATO again:
Super guarantee is calculated on the part of the payment that relates to the individual's work, this is usually on the invoice. You and the individual you are paying should negotiate and agree whether the payment includes super or whether super is payable in addition to the payment. Regardless of the way you calculate the amount, you will need to pay the super contribution to the individual's nominated super fund. You cannot satisfy the obligation by paying the amount directly to the individual. This applies even if the payment to the individual is agreed at a rate inclusive of super.
With ATO's Small Business Super Clearing House (SBSCH) shutting down this FY and being delegated to alternative and largely commercial services, I found that the most cost-effective way is to:
Sign up as an employer with my super fund's clearing house - This is free of charge but you have to provide them with the name of your payroll system!
Sign up for a payroll software – I used Payroller cause I found it the quickest to set up. The big ones like Xero and Employment Hero are less straightforward and are more expensive.
If you're the contractor getting paid super, Payroller Employee is also quick to set up!
Where Does This Leave Us?
While Payday Super is a step forward for employees, its implications for freelancers in the creative industries are very complex given the varying arrangements and contracts we have per project.
On paper, it is a win for worker equity. Freelancers and gig workers have been short-changed on retirement savings for decades, hidden behind the idea that having an ABN absolves an employer of paying into their super. But in reality, musicians might be getting fewer opportunities because of this – two jazz festivals were recently cancelled due to Payday Super! For small businesses who are already having it tough with their finances, the additional costs associated with paying super through payroll apps is yet another burden to carry. The system risks suffocating the very culture it aims to protect.
Until policymakers and industry bodies design streamlined, zero-cost avenues that reflect the reality of fluid project-based work, the burden rests squarely on us. At the end of the day we are the ones who have to communicate openly before stepping into the studio, quote transparently to delineate labour from equipment, and support one another in setting up systems that can work within the bounds of our entrepreneurial capacity.
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