A recent decision from the Administrative Review Tribunal is a timely reminder that the label you put on a working relationship matters far less than the substance of it.

The case involved a dental clinic that engaged an oral health therapist under what it believed was a contractor arrangement. On that basis, the clinic didn't pay superannuation guarantee on her earnings. The Tribunal disagreed — and found the clinic liable for the super guarantee charge, along with the penalties and interest that come with it.

How could this happen if there was a contract in place?

Superannuation law uses a broader definition of "employee" than most business owners realise. Even where a genuine contract exists, a worker can still be treated as an employee for super purposes if the arrangement is essentially about paying for their personal labour, rather than paying for a result or an outcome they deliver using their own business.

In this case, the Tribunal pointed to several factors that tipped the relationship into employment territory:

• The contract itself carried the hallmarks of an employment relationship, not a business-to-business one.
• The therapist worked in a regulated profession and wasn't able to operate independently of the clinic.
• She was engaged personally to work as part of the clinic's team — not simply given access to the premises and equipment in exchange for a fee.
• The clinic couldn't show she had a genuine, practical right to send someone else to do the work in her place.
• Her pay wasn't a straightforward fee for service — it was adjusted by the clinic based on what was billed to patients, which looked more like a wage than a contractor invoice.

What this means for your business

If you engage contractors, subcontractors, or "commission-based" workers anywhere in your business — trades, allied health, consultants, sales reps, or admin support — this case is worth pausing on. The ATO and the Tribunal look past the paperwork and ask what's actually happening day to day: who controls the work, who can delegate it, how the person is paid, and whether they're genuinely running their own operation or simply supplying their labour to yours.

Getting this wrong isn't a small administrative slip. Super guarantee charge liabilities aren't tax deductible, come with interest and penalties, and can stretch back years once they're identified.

If you're not certain how your contractor arrangements would hold up under this kind of scrutiny, it's worth having the conversation before the ATO raises it for you. Get in touch with the team at RGA and we'll help you review where you stand.

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