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ThatLadyWhoAsks(Initiate)Initiate
22 May 2024

I have a sole trader contractor who is paid for their labour (hours worked). Our contract states that their hourly rate is inclusive of superannuation obligations. They have verbally told me to pay the entire amount of their invoice to them, and that they deposit the superannuation portion of each invoice into their superannuation fund. Someone has just told me that I am legally obligated to pay the superannuation portion directly to their superannuation fund and should not be leaving it to them to do this. What are my obligations? Is it okay to continue paying the entirety of the invoice to the contractor?

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Bruce4Tax(Taxicorn)Taxicorn
23 May 2024

Employer contribution to a super fund

is only method by which the company's SG obligation can be satisfied.



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Bruce4Tax(Taxicorn)Taxicorn
23 May 2024

Our contract states that their hourly rate is inclusive of superannuation obligations.


Law 101 - you cannot contract out of a statutory obligation e.g. SG


Someone has just told me that I am legally obligated to pay the superannuation portion directly to their superannuation fund


Correct


Is it okay to continue paying the entirety of the invoice to the contractor?


No



ThatLadyWhoAsks(Initiate)Initiate
23 May 2024

Law 101 - you cannot contract out of a statutory obligation e.g. SG


Reading the Question 101 - The contract states that we are paying them superannuation. I never questioned our obligation to pay them superannuation. My question was about the method of paying the superannuation. I have received conflicting information regarding this for when contractors are paid via invoice instead of payroll.

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Do I need to pay super directly to my contractor's superannuation fund? | ATO Community