Superannuation for Sole-Trader Musicians: What Venues Can and Cannot Do
Hold on to your britches, this one is a hairy topic!
There has been a lot of confusion lately about clubs and venues paying superannuation to musicians. Different venues seem to be receiving different advice, musicians are being asked to invoice in different ways, and some clubs are concerned that paying super means putting every musician on their payroll as an employee.
I have spent quite a bit of time reading the ATO information and the relevant legislation and analysing it with AI. This is my plain English understanding of how it works.
I am not an accountant or lawyer, so this is not formal professional advice. It is simply an attempt to explain the rules in a practical way for musicians, venues and booking agents, the way I understand it.
Why can a sole-trader musician receive super?
Under section 12(8) of the Superannuation Guarantee (Administration) Act 1992, an individual paid to perform or participate in music, entertainment, sport and certain similar activities is treated as an employee of the person legally liable to make the payment.
This definition applies specifically for superannuation purposes. It does not necessarily make the musician an employee for every other legal, taxation or workplace purpose.
A musician may therefore still be:
a genuine sole trader;
operating under an ABN;
issuing invoices;
registered for GST;
supplying their own instruments, PA and equipment;
working for numerous venues;
responsible for their own business expenses and income tax.
None of those things automatically removes the venue’s super obligation when the contract is directly with the individual musician. The ATO specifically states that some independent contractors are entitled to super even when they have an ABN and submit invoices.
This does not mean every sole trader hired by a club automatically receives super. Some other contractors may qualify under a separate rule where the contract is mainly for their personal labour, but musicians and performers are specifically named under the performer provision.
Does the musician have to go onto the club’s payroll?
Not necessarily.
Paying super to a musician does not automatically turn that musician into a normal PAYG employee.
A genuine independent contractor can generally continue invoicing through their ABN and managing their own income tax and GST. The ATO says independent contractors generally handle their own tax obligations unless another withholding rule applies, such as not supplying an ABN, entering a voluntary withholding agreement or performing certain promotional work.
The ATO also states that businesses do not have to start reporting independent contractors through Single Touch Payroll simply because they are required to pay the contractor’s super. A club may use its payroll or super-clearing software to process the contribution, but that is an administrative choice rather than proof that the musician has become a normal employee.
Does the club have to pay super on top of the musician’s fee?
This is where the biggest misunderstanding occurs.
The super law requires the legally responsible payer to make the correct super contribution. It does not automatically decide what commercial price the club and musician agreed for the booking.
There are two basic ways the price can be negotiated.
Option 1: The performance fee excludes super
The musician may quote:
Performance fee: $500, excluding any compulsory superannuation.
In that case, assuming the entire $500 relates to the performance:
the musician receives $500;
the club pays $60 directly into the musician’s super fund;
the total cost to the club is $560.
This is the clearest arrangement for musicians who want to preserve their established performance fee.
The booking confirmation, quote or invoice should clearly state:
The agreed performance fee excludes any compulsory superannuation guarantee contribution. Any legally required superannuation is payable in addition to the fee and directly into the musician’s nominated super fund.
Option 2: The total package includes super
A club may instead say:
Our total budget is $500, including compulsory superannuation.
The musician can accept that offer, reject it or quote a higher total package.
If $500 is genuinely agreed in advance as the total package, the club could divide it approximately as follows:
performance payment to the musician: $446.43;
super paid directly to the fund: $53.57;
total club cost: $500.
The important point is that this needs to be agreed as part of the price negotiation.
Clubs and independent contractors are generally free to negotiate their commercial terms, including whether the quoted amount is inclusive or exclusive of additional costs.
A musician who wants to continue receiving a $500 performance payment could quote the inclusive package as:
Total package including compulsory superannuation: $560.
The club would then pay $500 to the musician and $60 to the super fund.
Can a club insist that all future quotes include super?
For future bookings, a club can generally make inclusive-super pricing part of its booking policy.
It could say:
We will only accept artist quotes that include any compulsory superannuation within the total package.
A musician is free to accept, reject or adjust their price.
The uncomfortable commercial reality is that a venue can choose not to offer future work to musicians who will not accept its pricing terms, provided it is not breaking an existing contract or acting unlawfully for some other reason.
The best response is not necessarily to argue about the wording. It may simply be to adjust the quoted package so the musician’s actual performance payment remains where it needs to be.
Can a club take super out of an already agreed fee?
Not automatically.
Suppose a musician and club have already confirmed:
Saturday night performance: $500.
If nobody said that the $500 was inclusive of super, the club should not later decide that the musician will now receive only $446.43, with the balance paid into super.
That would be an attempt to change the agreed price.
A contract does not have to be a formally signed document. An accepted quote, email exchange, text conversation or verbal agreement can form a legally enforceable contract. Both parties generally need to agree to changes to the original terms.
Whether a particular booking is legally enforceable will depend on what was actually agreed and what evidence exists. Musicians should therefore confirm every booking in writing, including:
the date;
performance times;
agreed fee;
whether the fee includes or excludes super;
GST treatment;
cancellation terms.
Without clear written terms, the musician may still have a contract, but proving the terms becomes much harder.
What a club legally cannot do
A club cannot simply pay the full invoice amount into the musician’s bank account and tell the musician to make their own super contribution.
The ATO specifically states that paying an additional amount directly to an eligible contractor does not count as the payer’s super contribution. The contribution must be made to the musician’s complying super fund.
For example, this is not compliant:
Club pays musician $560 in cash and tells the musician that $60 is their super.
Even if the musician later contributes $60 personally, that does not turn it into the club’s compulsory super guarantee payment.
The club also cannot:
label part of a cash payment as super without paying it into the fund;
expect the musician to take over the club’s legal SG responsibility;
use invoice wording to disguise an unpaid super contribution;
assume that having an ABN automatically removes the musician’s entitlement;
retrospectively change an agreed exclusive fee to an inclusive package without the musician accepting the change.
If the club does not pay the correct super in full, on time and to the correct fund, it may become liable for the superannuation guarantee charge and associated interest and administration consequences.
What about GST?
GST and super are separate.
Where the musician is registered for GST, the invoice should clearly separate:
the performance fee;
GST;
any separately charged expenses or equipment hire;
the super contribution payable directly by the venue.
The ATO says GST is not included when calculating super for an eligible independent contractor. Super is calculated on the qualifying work or labour component rather than the GST-inclusive invoice total.
For example:
Performance fee: $500
GST: $50
Invoice payable to musician: $550
Super payable separately to fund: $60
The venue should not calculate super as 12% of $550.
What if the musician operates through a company?
The position can be different where the venue’s contract is genuinely with a company, trust or partnership rather than directly with the individual musician.
The ATO states that when a business contracts with a company, trust or partnership, it generally does not pay super directly for the individual engaged by that entity to complete the work. The entity may have its own obligations to the person performing.
That does not mean every musician should immediately create a company. A company brings accounting, tax, ASIC and administration costs. It is a genuine business-structure decision, not simply different wording on an invoice.
How does super work when a band is booked?
Band payments can become more complicated because the venue may pay several musicians separately, pay one band member for the entire group, or receive an invoice from a partnership, company or booking agency.
The main question is always:
Who is legally responsible for paying each individual musician?
Under the super legislation, an individual musician paid to perform is treated as an employee, for super purposes, of the person legally liable to make that payment. Each payment must be considered according to what it is actually for, and all or part of a payment may be directly connected to a particular musician’s performance.
Option 1: Each band member invoices the venue separately
This is probably the clearest arrangement.
Each musician:
submits their own invoice;
supplies their own ABN and super details;
receives their performance payment directly;
has their super paid directly into their nominated fund by the venue.
For example, if four musicians are each being paid a $500 performance fee excluding super, the venue would pay each musician $500 and contribute $60 to each musician’s super fund.
The venue should not pay one combined super contribution to the bandleader and expect it to cover everyone. Each eligible individual needs their contribution paid into their own fund.
Option 2: One band member invoices the venue for the whole band
This is common, but it can create the most confusion.
For example, the bandleader might invoice the venue $2,000 and then pay $500 to each of the four musicians.
Using one band member’s sole-trader ABN does not automatically turn the whole band into a separate business entity. The arrangement needs to make clear:
whether the venue hired the bandleader personally to supply the whole band;
whether the bandleader is legally responsible for paying the other musicians;
whether the bandleader is merely collecting the money on behalf of everyone;
how much of the total payment relates to each performer.
If the bandleader has contracted to supply the band and is legally responsible for paying the other musicians, the likely division of responsibility is:
the venue considers its super obligation to the bandleader for the part of the payment directly connected with the bandleader’s own performance;
the bandleader considers their own super obligations to each individual musician they pay.
The bandleader may therefore become a super payer. The other musicians can still be entitled to super even though they are friends, occasional substitutes, casual band members or sole traders with their own ABNs.
The bandleader would need to collect the necessary super-fund details and pay any compulsory contributions directly into the other musicians’ funds. Simply giving each musician extra cash and calling it super would not satisfy that obligation. The ATO states that an additional amount paid directly to an eligible contractor does not count as an SG contribution.
If the bandleader is only acting as a payment collector or representative, and the venue is legally responsible for paying each musician, the venue may remain responsible for each performer’s super. Routing the money through one person’s bank account does not, by itself, decide who is legally liable.
This arrangement should be confirmed in writing before the performance. Otherwise, the venue and bandleader may each assume the other is paying the super, leaving it unpaid.
Option 3: The band operates as a genuine partnership
A band may operate as a partnership with:
its own partnership ABN;
a partnership bank account;
records showing who the partners are;
invoices issued by the partnership;
income and expenses accounted for through the partnership.
Where the venue genuinely contracts with and pays a partnership, the ATO says the venue generally does not have to pay super directly for the individuals performing the work.
Partners are generally self-employed through the partnership and do not pay compulsory SG to themselves. They can make their own personal super contributions.
However, if the partnership engages an additional musician who is not a partner, such as a substitute player or hired backing vocalist, the partnership may have to pay super for that individual.
Simply placing a band name on an invoice does not necessarily establish a genuine partnership. The actual legal and business arrangement matters, not just the name printed at the top of the invoice.
Option 4: The band invoices through a company or trust
Where a venue genuinely contracts with a company or trust, the venue generally does not pay super directly for the individual musicians supplied by that entity.
The company or trust must then assess its own obligations to the musicians it pays. If it pays individuals to perform, it may have to make the required super contributions for them.
Operating through a company can simplify the venue’s position, but it transfers the administration to the company. It does not make super disappear.
Creating a company or trust also brings accounting, ASIC, tax and administrative costs, so it should be treated as a genuine business decision rather than a quick way to change invoice wording.
Option 5: An agency invoices the venue for the band
The agency’s role needs to be clearly defined.
If the agency is merely arranging the booking and collecting money on behalf of the band, the venue may still be legally responsible for paying the performers and their super.
If the agency contracts with the musicians in its own right and is legally responsible for paying them, the agency may be responsible for the super contributions.
If the band is engaged through a genuine company, trust or partnership, the venue or agency may pay that entity without making separate super contributions directly to each band member. The entity then deals with its own obligations.
The booking paperwork should state:
who the venue is hiring;
who issues the invoice;
who is legally responsible for paying each musician;
who pays the super;
whether the fee is inclusive or exclusive of super;
how the agent’s commission is calculated;
whether the agent receives and distributes the entire band payment.
In NSW, an agent receiving money on behalf of performers also has trust-account, payment, financial-statement and recordkeeping responsibilities.
What bands should avoid
The riskiest arrangement is:
One member invoices the full amount through their sole-trader ABN, the venue pays the full amount into that member’s bank account, everyone splits the money, and nobody identifies who is responsible for the super.
That arrangement does not automatically exempt either the venue or the bandleader.
Bands should also avoid:
assuming a band name is automatically a company or partnership;
paying one lump of “super” to the bandleader without identifying the eligible performers;
giving band members extra cash instead of paying super into their funds;
allowing the venue, agent and bandleader to each assume someone else is handling it;
deducting super from individual musicians’ previously agreed fees without that arrangement being agreed;
charging an agent’s commission on the super contribution itself.
The cleanest band-payment arrangements
The simplest options are usually:
Each musician invoices separately, with the venue paying each musician’s super; or
A genuine company or partnership invoices for the band, with that entity handling any obligations to the performers it pays.
One band member invoicing for everyone can still work, but the agreement needs to spell out the payment structure and super responsibilities. Without that clarity, both the venue and the bandleader may be exposed to unpaid-super problems.
Who is responsible when a booking agent is involved?
The super legislation says the performer is an employee, for SG purposes, of the person legally liable to make the payment.
That means the answer depends on the actual arrangement.
If the club contracts directly with the musician and the agent merely arranges the booking or collects the money on the musician’s behalf, the club may remain legally responsible for the super.
If the agency contracts with the musician in its own right and the agency is legally responsible for paying the musician, the agency may be the responsible super payer.
The club and agent should not simply assume that the other party is handling it. The booking agreement should state:
who is hiring the musician;
who is legally responsible for the performance fee;
who will pay the super;
whether the club pays the musician or the agent;
how the agent’s commission is calculated.
An agent receiving the performance money
The following information relates specifically to NSW, because entertainment-agent legislation differs between states and territories.
Under the NSW Entertainment Industry Act 2013, an agent or performer representative who receives money on behalf of a performer must hold that money exclusively for the performer.
If the money is not paid to the performer immediately, it must generally be placed into a dedicated NSW trust account and disbursed as directed by the performer within 14 days of the agent receiving it.
The agent must also provide a financial statement as soon as practicable. The statement to the performer must show:
the total money received on the performer’s behalf;
the amount paid to the performer;
the payment method;
the agent’s fee or commission deducted;
any other expenses deducted;
the date and details of the performance;
the agent’s business name;
the agent’s ABN and ACN where applicable.
In plain English, the musician should be able to clearly follow the entire transaction:
Amount paid by venue
Less agent commission
Less GST on the agent fee, where applicable
Less any authorised expenses
Net amount paid to artist
Super paid separately and by whom
The NSW legislation does not expressly require every statement to contain separate lines labelled “GST” and “super”, but a clear agent remittance should show enough detail for the artist to reconcile the booking properly.
The agent must retain relevant accounting records, financial statements and agreements for at least five years. Performers also have rights to request copies of relevant records.
Can an agent charge commission on the super?
In NSW, superannuation payments are expressly excluded when calculating the amount on which the standard capped agent fee is based. In other words, the agent should not be charging commission on the compulsory super contribution.
For a standard live musical or variety performance that does not involve film, television or electronic media, the NSW regulation generally caps the agent fee at:
10% for an engagement of up to five weeks;
5% for the period after five weeks.
Different rules can apply where there is a qualifying written managerial agreement involving additional management services.
For an ordinary one-night club booking, the standard agent commission would generally be calculated on the performance amount, excluding the super payment.
How quickly must NSW venues and agents pay?
Under the NSW legislation:
a performer representative holding money for the artist generally needs to disburse it as directed within 14 days;
a venue representative receiving money on behalf of the performer generally must also disburse it within 14 days;
an entertainment hirer generally must pay the performer within one calendar month after the performance, unless another payment period has been agreed in writing.
These are separate from the federal superannuation payment rules.
My practical view for musicians
The cleanest approach is to discuss super when the booking is made, not after the gig and not when the invoice is issued.
A booking confirmation could say:
Performance fee: $500, excluding GST and any compulsory superannuation guarantee contribution. Any legally required superannuation is payable separately by the legally responsible payer directly into the musician’s nominated super fund.
Alternatively, where the venue requires an inclusive package:
Total package including compulsory superannuation: $560. This consists of a $500 performance payment and a $60 compulsory super contribution payable directly into the musician’s nominated super fund.
Musicians should also have the following ready:
completed ATO Superannuation Standard Choice Form;
super-fund compliance letter;
current public liability Certificate of Currency;
ABN and invoicing details;
written booking terms;
clear cancellation conditions.
The main thing is transparency. Everybody should know the actual performance payment, the super contribution, who is responsible for paying it and whether the agreed price is inclusive or exclusive.
The bottom line
A sole-trader musician can remain an independent contractor while still being treated as an employee specifically for super purposes.
A club can negotiate either:
a performance fee with super added on top; or
a total package that already includes super.
What matters is that the arrangement is clear and agreed in advance.
The club must still pay the compulsory super contribution directly into the musician’s fund. It cannot hand the full amount to the musician and tell them to pay their own super.
A venue can set inclusive-super pricing for future bookings, and a musician can choose whether to accept it. However, a venue should not retrospectively reduce an already agreed performance fee without the musician’s agreement.
Where an agent is involved, the contract must make clear whether the venue or agency is legally responsible for paying the musician and the super. In NSW, agents receiving artist money also have trust-account, payment, financial-statement and recordkeeping responsibilities, and they should not charge commission on the super contribution.
The rules are manageable once the performance fee and super contribution are treated as two clearly identified parts of the transaction.
Clear as mud?
Comment with your thoughts on the subject!