Recently I was asked about how a not-for-profit music festival might transition to the new payday super rules. Although the requirement to pay super to musicians (and other creative professionals) has been in place for some time, the need to pay super contributions within 7 days of paying them has sparked a lot of questions. Mainly because festivals tend to employ dozens, if not hundreds of musicians under a range of different structures.
As this is an issue which is gaining some media attention, and one which will impact a range of live events producers, I’ve put together a guide of how to practically work through these changes. Feel free to send any comments or additions to me here.
State of Play
Under Section 12(8) of the Superannuation Guarantee (Administration) Act 1992, musicians, performing artists, and supporting technical staff (sound, lighting, stage management) paid to perform or present services are statutorily deemed employees for superannuation purposes, even if they invoice with an ABN as sole traders.
With Australia’s Payday Super rules requiring superannuation contributions to be received by employee super funds within 7 business days of payment, non-profit music festivals could consider transitioning from post-event processing to a structured, pre-engagement workflow.
- Pre-Engagement Onboarding Workflow
The 7-day window leaves no margin for administrative delays after the event. All worker and performer onboarding should be completed before anyone steps onto a stage or receives payment.
a. Identify Entities vs. Sole Traders
Start your onboarding process by establishing how the performer or worker is contracting:
- Sole Trader / Individual: Must submit onboarding forms for Super Guarantee (SG) payments.
- Incorporated Entity (Pty Ltd or Trust): Excluded from Section 12(8). If a band contracts through a registered company or trust, no need to add super to their fee.
- Partnership: Excluded from Section 12(8).
b. Standardise Pre-Engagement Forms
Require every individual performer (sole trader), support technician, and gig worker to complete standard onboarding documentation as a condition of their engagement contract:
- ATO Superannuation Standard Choice Form: Captures fund name, Unique Superannuation Identifier (USI), and member account number.
- Tax File Number (TFN) Declaration: Required for set up in payroll systems.
- Banking & Personal Details: Full legal name, date of birth, address, and bank account details.
- ABN declaration or Statement by a Supplier (to ensure you don’t have to withhold tax)
- Insurance details (not needed for payday super, but good to collect at the same time)
Most, if not all, of these forms can be issued digitally via your accounting software.
- Contracting & Fee Structure Policy
a. Communicating “Fees Inclusive of Super”
A common point of dispute with artists and technical staff is whether an agreed fee includes or excludes super. So, clear this up straight away.
Contractual Clarity: Contracts and booking emails must explicitly state:
“The total agreed performance fee of $X,XXX is inclusive of the statutory Superannuation Guarantee (SG) rate of 12%.”
Invoice Breakdown: Advise sole traders that their invoice total should reflect the gross amount, and should show any expenses separately. So Fee + Super + Expenses + GST (if applicable). Note that reimbursement of expenses is not included when calculating super.
b. Splitting a Band’s Fee Equally Among Members
Require the band leader/manager to provide an agreed percentage split (typically equal splits, e.g., 25% each for a 4-piece band) and individual onboarding forms for each member before the festival.
- Processing & Executing via Xero
To meet the 7-business-day deadline, process all festival payments (performers, stagehands, sound engineers) through your accounting software, not standard Accounts Payable invoices. I’ll walk through how to do this in Xero; if you’re using other software, refer to their how tos.
a. Setup Steps in Xero
- Employee Profile Creation: Add each individual performer/technician as a Casual Employee in Xero Payroll.
- Super Fund Assignment: Enter their nominated super fund USI and member number.
- Execute Auto-Super: Ensure Xero Automatic Superannuation is configured and funded. (Included in all Xero plans as long as 1 person is on payroll). Submit the pay run and initiate Xero Auto-Super on the exact day payments are made.
b. Xero Payroll (Configured for Contractors)
To pay superannuation to a contractor without withholding Pay-As-You-Go (PAYG) tax, you can process them through Xero Payroll without triggering tax withholding or Single Touch Payroll (STP) employee requirements by setting up their profile correctly:
i. Add as a Non-Employee / Contractor:
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- Go to Payroll > Employees > Add Employee.
- Under Employment Details, set the Employment Type to Contractor.
- Select Income Type as Non-employee (or Labour Hire if applicable, though Non-employee bypasses standard wage/tax scales).
- Enter their ABN (their TFN is optional for Non-employee status).
ii. Configure the Pay Template for Super Only:
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- Go to the contractor’s Pay Template tab.
- Under Earnings, leave the hourly rate or base pay at $0.00 (since you are paying their main invoice directly via Accounts Payable/Bills).
- Under Superannuation Fund, add a super line:
- Contribution Type: Statutory Guarantee (SGC).
- Calculation Type: Set as a Fixed Amount (or Percentage of Earnings if linked to a base pay item, but Fixed Amount works best when matching an invoice calculation).
- Enter the exact super amount calculated from their invoice.
iii. Run the Pay Run:
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- When you process a pay run, Xero will calculate $0 PAYG tax withheld and $0 net pay, but it will accrue the super line into your Xero Auto-Super clearing house tab.
- You then execute the super payment using Xero Auto-Super alongside your standard employee payments.
Preparation is everything
At the end of the day, the more prep you do before the event, the easier the payment of super is going to be when the event is done. Expect there to be hiccups! But get all the details you need before the day, set up your accounting software accordingly and dive in. And as always, get specific advice about your own circumstances from your friendly neighbourhood tax accountant.