Are you accidentally ripping-off freelancers?

Did you know a new Australian law means you might be accidentally exploiting freelancers? Even if you’re paying them fairly and treating them well, you could still be breaking the law.

Since July 2025 studio/agency owners must pay super on behalf of freelancers.
There are exemptions but it’s important to understand the new rules…

The (new) rules

Employers must pay the mandatory Superannuation Guarantee (SG) rate of 12% on behalf of freelancers.
Studios/agencies must request freelancers nominate their fund. If no fund is provided, the studio/agency must contribute to their own default super fund.
Super payments must be reported and paid quarterly, or more frequently if required, and must comply with SuperStream electronic reporting standards.
There are penalties for failing to pay required superannuation contributions on time.

Why the change?

The gig economy is growing.
The Superannuation Guarantee was introduced as mandatory savings to ensure all workers have a super fund when they retire.
Gig workers fall between the cracks and the Government is concerned this ‘new’ group of workers will not have super to access when they retire.
The ATO is after employers who have routinely demanded gig workers/freelancers get an ABN to make long-term contractors ‘look like’ short term freelancers (so the can avoid PAYG and super obligations).

The exemptions

If you contract a company/trust/partnership, you don’t have SG obligations however the responsibility is on the studios/agencies to ensure the ‘structure’ is legitimate to avoid ATO enforcement. (See last point above.)
Holiday pay and sick pay are still generally not guaranteed for freelancers unless specifically contracted.

So what?

The ATO is increasing audits and enforcement. Studios and agencies should carefully check their arrangements and expect to pay superannuation for most freelancers.
It appears freelancers working within a PTY LTD company structure (but are they freelancers or are they self employed solo-operators?) hired to deliver a project are exempt.
Freelancers hired on a daily/hourly rate to help with overflow or replace someone who is ill must have super contributed on their behalf

That said, the responsibility for deciding whether super needs to be paid seems to rest on the employees.

Next step:

Freelancers:
Be proactive with new clients. Ask agencies to complete super contribution forms and clarify your employment status for super purposes before you start. Many employers are still learning these new obligations.

Employees:
Any of these links below will get you more information.
Still not sure? Talk to your accountant.
Sure but unwilling to do admin? Consider using a recruiter who will coordinate the freelancer, bill you, and handle paying the freelancers and their superannuation needs.

ATO – Work out if you have to pay super for independent contractors

ATO – The difference between employees and independent contractors

Creative workplaces article about super and independent contractors

As always, happy to discuss further, just email Carol.

Carol Mackay

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About Carol

After 30+ years running a design studio, I accumulated a pretty special network of fellow designers. One thing most have in common: a need for more information about the ‘business’ side of design. Most are impatient with any task competing for time spent doing what they love – designing so they wanted more info about how to work more efficiently and effectively.

Not me. I love that intersection between design and business. I built a career working with Ombudsman schemes, the Emergency Services sector and the Courts. My special power has always been an ability to use design to translate the difficult to understand or the unpalatable message.

I now use exactly the same skills with creative business owners. I translate the indigestible into bite-sized chunks of information. I share insights, introduce tools and embed processes to help others build confidence business decision-making skills. More confidence makes it easier to grasp opportunities. More confidence makes it easier to recognise a good client from the bad.

Outside DBC I have mentored with Womentor, AGDA The Aunties, and most recently Regional Arts NSW.
And I’m a proud volunteer and board member of Never Not Creative.

Always happy to chat, I can be contacted here.