What this ruling covers
The Australian Taxation Office (ATO) has released a draft ruling, SGD 2026/D1, explaining how to calculate superannuation guarantee (SG) contributions for contractors treated as employees under section 12(3) of the Superannuation Guarantee (Administration) Act 1992. That provision applies to people working under a contract that is wholly or principally for their labour.
What counts as qualifying earnings
The draft ruling sets out which payments under these contracts count as qualifying earnings for SG purposes and which do not.
- Payments that are for the person's labour - physical, mental, or artistic effort - are included in qualifying earnings.
- Payments for equipment, materials, or other non-labour components are excluded from qualifying earnings.
Apportioning mixed payments
Where a single payment covers both labour and non-labour components, the ruling states that employers are required to apportion the payment. Only the labour portion of that payment counts as qualifying earnings for SG contribution purposes.
Worked examples in the draft
The draft ruling includes four worked examples showing how the ATO expects apportionment to work in practice. The examples cover:
- On-call and overtime payments
- Payment for equipment
- Reasonable market value of labour
- Using industry award rates
Status of this ruling
SGD 2026/D1 is a draft for public comment and has not yet been finalised. Once published in its final form, the determination will be administratively binding on the Commissioner of Taxation.
Submissions and further information
Feedback on the draft ruling can be submitted to the ATO via the contact details in Appendix 1 of the document. The source does not specify a submission closing date. The full draft ruling is available at https://www.ato.gov.au/law/view/document?docid=DSD/SGD2026D1/NAT/ATO/00001.
The ATO legal database is the source for the finalised version of this determination once it is published.
This is a plain-English summary for information only, not legal or compliance advice. Always check the official source or consult a qualified professional.