Dear ATO Community,
I am seeking formal clarification from the ATO on superannuation obligations for live performers engaged as sole traders (ABN holders), specifically under section 12(8) of the Superannuation Guarantee (Administration) Act 1992 (SGAA).
There is currently widespread confusion in the live entertainment industry, where some venues are being advised that if they frame a performer’s engagement as “results-based,” they are exempt from superannuation obligations. In my view — and based on the wording of the Act and published ATO rulings — this interpretation is incorrect.
The Relevant Law – Section 12(8) SGAA
Section 12(8) of the SGAA states:
“If a person works under a contract that is wholly or principally for the labour of the person, the person is an employee of the other party to the contract.”
This section extends the definition of “employee” for superannuation purposes to certain sole traders and contractors, even if they hold an ABN and are invoicing the client. Its purpose is to ensure that those working under personal service contracts are afforded superannuation rights where appropriate.
In these cases, the “employer” (i.e. the venue) is legally required to pay the superannuation guarantee.
There is no requirement in the SGAA for a person to be employed in the conventional PAYG sense — the section is intended to catch arrangements that are functionally employment, even if structured as contracting.
Confirmed ATO Position – SGR 2005/1
The ATO has issued Superannuation Guarantee Ruling SGR 2005/1, which directly addresses the interpretation of section 12(8).
Paragraph 13 of SGR 2005/1 states:
“A person may still be an employee under section 12(8) even where they are conducting a business as a sole trader. For example, musicians, artists, or other entertainers who are paid for their personal performance of work may be employees under subsection 12(8).”
This makes clear that live performers engaged to personally deliver a performance — even under an ABN — are likely to be deemed employees for superannuation purposes if:
- The individual is paid for their personal labour and skill;
- The individual is required to perform the work themselves (no right to delegate or subcontract); and
- The contract is not genuinely results-based but is for the act of performing.
These three tests are also outlined in paragraphs 26–30 of SGR 2005/1.
Misuse of “Results-Based Contract” Exception
Some advisers are telling venues that if a contract is “results-based” — i.e. payment is for an outcome rather than time worked — then super is not payable.
This advice is deeply flawed, for the following reasons:
- Labelling a contract “results-based” does not change its substance. The ATO and courts consider the true nature of the arrangement — not what it is called.
- A live performance is inherently labour. The “result” (entertainment of an audience) only occurs through the performer’s physical presence, time, and skill.
- There is no product or tangible output. Unlike a composition, recording, or commissioned work, a live performance is a real-time service that is entirely labour-based.
- SGR 2005/1 is clear: if the contract is for personal performance of work, it meets the threshold under section 12(8).
Industry Risk
We are aware of several venues that have been audited and penalised by the ATO in recent years for failing to pay superannuation to sole traders performing under ABNs. This is not theoretical — it reflects active ATO compliance in line with the law and ruling.
Unfortunately, a growing number of venues are being told that they are safe from super obligations if they simply draft a “results-based” agreement, regardless of the underlying service. This creates a real compliance risk for businesses and denies legitimate super to workers.
Request for ATO Clarification
In light of this confusion and the risk of widespread non-compliance, I respectfully ask the ATO to confirm:
- That live performance engagements (e.g. musicians, singers, DJs) contracted as sole traders and paid for their personal performance of work generally fall within section 12(8) and require superannuation to be paid.
- That the “results-based” exception is only relevant in narrow, exceptional circumstances where there is a genuine and independent outcome (such as the delivery of a product or measurable result), and not where labour is the key element.
- That SGR 2005/1 remains the ATO’s current position, and that venues, booking agents, and performers should refer to it when determining obligations under the SGAA.
A formal and clear ATO statement — or the publication of targeted guidance for the live entertainment industry — would be extremely helpful in settling this matter and ensuring both venues and performers are protected.
Thank you for your time and input.
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