Superannuation Guarantee Charge
The AAT has upheld superannuation guarantee charge default assessments against a partnership for failing to make minimum superannuation contributions for an independent contractor operating within its business.
After considering the factors that indicate the existence of an employee/employer relationship, the Tribunal held that the contractor was an employee.
Indicators that suggest an employee/employer relationship exists include:
· the level of control between an individual and the other party;
· the mode of remuneration;
· the provision for annual leave; and
· the right to suspend or dismiss an individual by the other party.
Note: The classification of an individual as an employee or as an independent contractor is not based on the legal terms used in a contract. All of the facts and circumstances of the particular situation must be considered.
Note: An individual engaged for their labour can be deemed to be an employee for superannuation guarantee purposes even where the individual is a contractor.
Related Articles:
Superannuation Guarantee Regulations
Superannuation Related Taxpayer Alert