Hi @Syed,
The minimum super you must pay is the Super Guarantee (SG) percentage of the worker's ordinary time earnings, which is the amount paid for the labour component of the contract in the relevant period.
In your example, if the contractor's invoice is $5,000 and you've only paid $3,000 so far, the 12% super is calculated on the $3,000 paid (assuming the entire amount is for labour). The fact that you’re required under the contract to pay an additional $2,000 doesn't change your SG obligation for the relevant period. Super will be payable on the additional $2,000 when it is actually paid to the contractor.
It's important to note that this applies if your independent contractor is an employee for SG purposes. This means you pay them mainly for their labour (more than half the dollar value is for their labour), they're paid for their personal labour and skills, and they perform the work themselves without delegating it.
When calculating super, you need to consider the labour component of the contract. Do not include:
- any contract payments that are for material and equipment
- overtime for which the worker was paid overtime rates
- GST.
You can check if your contractor is entitled to super guarantee contributions and calculate the correct amounts using our super for independent contractors guidance.
We also have a superannuation guarantee eligibility decision tool to help work out if your contractor is entitled to super guarantee contributions.
[Response updated by moderator 20/02/2026]
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