Probin and FCT [2019]
The AAT has upheld the ATO’s Super Guarantee Charge (SGC) assessment of a ‘contractor’, ordering the employer to backpay 5 years of Superannuation Guarantee; $27,272.
The Tribunal found that he was engaged as an employee not an independent contractor under s12 of the Superannuation Guarantee Administration Act 1992 (SGAA).
The employer maintained the worker was engaged as an independent contractor, he provided an ABN and was responsible for all tax, holiday pay, workers compensation and superannuation.
The AAT said the status of a worker requires consideration of a range of circumstances and the ‘totality of the relationship between the parties’
Although he provided an ABN, the employer practically exercised full control of the workers’ daily activities.
The AAT made it clear that an employer can not contract out of Superannuation Guarantee obligations.
What next?
This is a significant finding for any employer that engages contractors to perform work.
If you have contract trainers, you may be liable to pay their Superannuation Guarantee.
Super is 9.5% of ordinary times earnings if a contractor was earning $80,000; super per year is $7,600 and over 5 years $38,000.
There are ATO tools to work these matters out and/or discuss with a qualified tax professional.