Do sole traders have to pay super?

You are not your own employee

business.gov.au: Superannuation is blunt about it: if you are a sole trader or a partner in a partnership, you do not have to pay super for yourself. The super guarantee is an employer obligation, and you do not employ yourself. Money you take out of the business is a drawing, not a wage.

You can still contribute to your own superannuation, and many sole traders do. Anything you put in is your own voluntary decision rather than a legal requirement, and there are caps on how much can go in concessionally — the ATO publishes the current figures, and they change, so check them rather than relying on a number you remember. For a sole trader with irregular income, the useful habit is to decide a percentage of each payment that goes to super and treat it like a bill, because there is no employer quietly doing it for you.

If you operate through a company, the answer changes

Structure matters here. A sole trader drawing money out of the business is taking a drawing. A director of a company who draws a wage is an employee of that company for super purposes, and the company owes super guarantee on it like any other employer. If you have incorporated, or are thinking about it, that is one of the differences to price in — alongside the company's own reporting obligations. business.gov.au: Business structures compares the structures.

Who counts as an employee for super

ATO: Work out if you have to pay super sets out the eligibility rules, and they are wider than most first-time employers expect:

• Age 18 and over — full-time, part-time and casual staff are all covered, and you pay super regardless of how many hours they work or how much you pay them.
• Under 18 — only if they work more than 30 hours in a week, regardless of what you pay them.
• Contractors paid mainly for their labour — the ATO treats them as eligible for super guarantee even if they quote you an ABN and look like a business. The super is calculated on the labour component of what you pay them.
• Family members working in the business are not exempt simply because they are family.

There are exceptions, including private or domestic workers under 30 hours a week. The contractor rule is the one that surprises people: a genuine contractor running their own business is responsible for their own super, but a contractor who is really providing their labour personally, under your direction, can be an employee for super even with an ABN in hand.

The rate, and where it sits

The super guarantee rate is 12% and applies for 2025–26, 2026–27 and 2027–28 onwards. ATO: Key superannuation rates and thresholds: Super guarantee has the rates and thresholds, including the maximum contribution base — the ceiling on earnings above which you do not have to pay, which rises each year and changed from a quarterly to an annual figure from 1 July 2026.

Super is paid in addition to wages, not out of them. If you agree to pay someone $30 an hour, a compliant payroll costs you $33.60 an hour, because the 12% is on top. Getting that backwards is one of the more expensive mistakes a new employer can make, because it is quietly repeated on every payslip.

How and when you pay it

Super is paid into the worker's chosen fund — or your default fund if they have not chosen, with a stapled fund check through the ATO where the rules call for it. ATO: Paying super for your employees covers the mechanics.

The timing changed on 1 July 2026: super guarantee now has to be paid on each payday rather than quarterly, and it must be received by the fund within 7 business days after payday. That matters for cash flow, because money that used to sit in your account for up to three months now leaves nearly as fast as the wages do. The deadlines are detailed in When are wages and super due?.

Late or short super is not a small matter. The super guarantee charge adds interest and an administration component, and the charge itself is not deductible — so the cost of missing a payment is worse than the cost of paying it on time.