The short answer
The ATO says a contractor can count as an employee for super if the contract is wholly or principally for their labour, even if they have an ABN. If you hire a company, trust or partnership instead, you do not have to pay super for the person they employ.
General information summarised from ATO guidance, not tax advice. Check the current ATO page and your accountant before you decide, because the rules and rates change.
Confidence: likely. These facts come from official pages that we found by search and did not read in full. Check the linked source before you rely on a figure.
The labour test
The ATO says a contract may be wholly or principally for labour if the worker is paid for personal labour and skills, performs the work personally and is paid for hours rather than a result.
Mixed contracts
Where a contract mixes labour with materials or plant hire, super applies only if it is principally for labour. Super is worked out on the labour part of the invoice.
Sole traders
The ATO says a sole trader or partner does not have to pay super for themselves.
Protect yourself
Write the scope clearly, separate labour and materials on invoices and ask your accountant to check how you classify workers.
Common questions
Does an ABN mean someone is not an employee for super?
No. The ATO says a contractor paid wholly or principally for labour can count as an employee for super even with an ABN.
Sources
- ATO: SGR 2005/1, superannuation guarantee: who is an employee?, checked 11 November 2026