Payday Super and subcontractors: what general contractors actually owe

From 1 July 2026, every employer in Australia has to pay superannuation guarantee (SG) at the same time as wages — same payday, not once a quarter. The Treasury Laws Amendment (Payday Superannuation) Act 2025 is now law, and SG contributions generally need to reach an employee’s fund within 7 business days of payday. For a general contractor, the natural assumption is “this is a payroll problem for our direct staff, not something that touches our subcontractor network.” That assumption is only half right.

The subcontractor test most GCs have never had to think about

A genuine subcontractor — a business invoicing you under its own ABN, quoting a price, bringing its own tools and insurance — isn’t an employee, and payday super doesn’t touch that relationship. But superannuation law has had a second, broader definition of “employee” since 1992 that most GCs have simply never had reason to look at: under section 12(3) of the Superannuation Guarantee (Administration) Act, someone working under a contract that’s wholly or principally for their labour is treated as an employee for super purposes — regardless of whether they hold an ABN, quote a fixed price, or call themselves a contractor. It isn’t an anti-avoidance rule aimed at dodgy arrangements; it’s a deliberate policy choice that applies to completely above-board engagements.

The distinction that matters is whether you’re paying for a contractor’s labour or paying for a result. A subcontractor bringing their own crew, plant, and materials to deliver a defined scope is a genuine business-to-business engagement. A sole trader you’ve engaged to personally do the work, paid an hourly or daily rate, supervised the same way as your own crew, is a much harder case to argue isn’t “mainly for labour” — and if it isn’t, you owe them super, ABN or not.

Why this gets more painful under payday super, not less

Under the old quarterly system, a wrong classification was a slow-building problem — get it wrong for a quarter, maybe catch it before the next BAS cycle. Under payday super, the same mistake compounds every single pay run, and the SG Charge (the penalty regime for a late or missed payment) is deliberately more expensive than just paying correctly in the first place. A handful of individual subcontractors on your books who genuinely are “mainly for labour” turns a classification nobody’s revisited in years from a quarterly exposure into a weekly-recurring one.

What’s worth doing before 1 July 2026

Not every subcontractor needs re-assessing — a subcontracting company bringing its own crew, or a trade quoting and invoicing a defined scope of work, sits clearly on the “genuine business” side of the line. The ones worth a second look are individual, ABN-holding tradies engaged personally, paid by time rather than by the job, and supervised day to day the way an employee would be. That’s a conversation worth having with your accountant per engagement, not a blanket policy — but worth having before the payment cycle tightens, not after the first missed payday triggers a charge.

Worth noting: Novato doesn’t handle payroll or superannuation directly, so this isn’t something the platform checks for you. But the worker-management question Novato already asks every subcontractor at engagement — solo, or bringing their own crew — turns out to be a useful first signal for this exact classification question too, since it’s asking a closely related thing: is this genuinely their own independent operation, or effectively one person’s labour engaged directly.