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 and 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 that freelancers nominate their fund. If no fund is provided, the studio/agency must contribute to its 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 time2. It’s risky to assume clients define 'design' the same way you do.
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 targeting employers who have routinely demanded that gig workers/freelancers obtain an ABN to make long-term contractors look like short-term freelancers (so they can avoid PAYG and super obligations).
The exemptions
If you contract a company, trust or partnership, you don't have SG obligations. However, the responsibility is on studios/agencies to ensure the 'structure' is legitimate to avoid ATO enforcement. (See the 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 with the employers.
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.
Employers:
Any of the links below will get you more information.
ATO - Work out if you have to pay super for independent contractors
ATO - The difference between employees and independent contractors
Creative Workplaces - About superannuation and independent contractors
Still not sure? Talk to your accountant (but a few we’ve heard from haven’t been up to date with the change and had to be referred to the ATO).
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.
What do you think?
What have I got wrong?
As always, happy to discuss further, just email Carol
Carol Mackay
Want more insights like this? Subscribe below. (And tell your friends )
The Design Business Review is Australia’s only online design management magazine. It’s professional development information written specifically for Australian designers by Australian designers. Best of all, it’s free.
