Sole Traders required to provide Superannuation Funds

Note: The Superannuation Guarantee Administration Act requires venues or agents to contribute Superannuation to sole traders when engaging them for performances.

In order for this to occur, a Superannuation Fund account must be provided by the entertainer/supplier.

This article seeks to clarify the requirements, including the contradiction that appears to exist in the legislation that states that Sole Traders are not required to operate a Super account, or make contributions themselves.

Do I need a Super Account? Why?

Surreal will not force any user to do anything it does not wish to do. However, not having a Superannuation account may impact certain abilities on the platform, as there are legislative obligations that are now clear for various parties to any entertainment booking. And in order to adhere to those obligations, certain users need to provide certain details, including Superannuation fund account details.

The functionality serves to protect those parties (as users on our platform) as best as possible. Under law, sole traders are not required to contribute superannuation to themselves. This ATO page specifies that.

However, under the Superannuation Guarantee (Administration) Act, and under the ATO’s Taxation Ruling 2023/4, it states that contributions must be made by employers for eligible employees. Paragraph 122 further clarifies:

“Under paragraph 12(8)(a), an entertainer, artist, musician, sportsperson et cetera. who is paid to perform, present or to participate in the performance or presentation of any music, play, dance, entertainment, sport, display or promotional activity or any similar activity involving the exercise of intellectual, artistic, musical, physical or other personal skills is an employee under the SGAA of the person liable to make the payment.”

As such, for these instances, sole traders are considered employees, and thereby the party(ies) engaging you are liable to make a superannuation contribution.In order for that contribution to be made, a destination superannuation fund must be available.

Since most entertainers/suppliers will likely have multiple employers, we thought it more practical to have the entertainer provide their own details, and if they don’t have one, they can (at their discretion) quickly get set up with our partner - Australian Retirement Trust. That way you don’t end up with multiple open superannuation funds that you have to track and manage separately.

In our opinion, the confluence of sole trader law vs employment law based on the defintion entertainers etc. as employees for superannuation, has complicated things and can be confusing for everyone. But it is clear that superannuation must be contributed, and in order to do that, a fund must exist to contribute those funds to.

Here’s some handy links:

• ATO - Taxation Ruling 2023/4 - Specifically referring to Entertainers. Refer to:
  • Appendix 2 - Meaning of employee under section 12 of the SGAA
  • Paragraphs 117 - 130
• ATO - Superannuation Guarantee Act - 12(8) - entertainers, musicians as employees