Editors can be paid for their editing work under a range of different work arrangements, some of which make them eligible to receive superannuation, even if they are sole traders.
The Australian Taxation Office (ATO) has an online super-guarantee eligibility tool to help workers and employers decide when superannuation should be paid. It has a set of questions to answer. There is no single question that determines whether superannuation is payable.
For editors who are clearly employees, whether full-time, part-time or casual, employers must pay the superannuation guarantee.
There will be two changes on 1 July 2022. The current minimum superannuation guarantee of 10% of salary or wages will increase to 10.5% on 1 July 2022. Some employers pay a higher percentage. Also, the threshold of $450 per month for super-guarantee eligibility will cease from 1 July 2022.
For self-employed editors it is less straightforward. The ATO identifies six factors that, taken together, help determine whether a worker is an employee or contractor for tax and super purposes:
- ability to subcontract/delegate
- basis of payment
- equipment and tools
- commercial risk
- control over work
Large organisations may have a set of questions for their suppliers, such as editors, to answer to help the payers decide whether they need to pay superannuation. These questions are usually based on the ATO’s eligibility tool.
If an employer enters into a contract with a company, trust or partnership, the employer does not have to pay super for the person employed to do the work. For self-employed editors who are sole traders, key issues that affect eligibility to receive super (or not) include:
- being paid a quoted price for an agreed or predetermined result
- using own tools, including a computer or laptop
- being responsible for fixing any problems or mistakes in work.
IPEd’s fair pay rates for self-employed editors information advises that editors’ rates cover a range of costs of being self-employed and running a business, such as paying themselves superannuation or equivalent. The ATO advises that where you have an income, but no employer to pay super for you, you can make personal super payments into a super account to save for your retirement. Most people can claim a tax deduction for personal super contributions.
The ATO also advises that in some circumstances, the government can also make additional contributions to your super as a super co-contribution or low-income super-tax offset.
The ATO is constantly refining its advice on classifying workers and super eligibility based on court cases, so check the ATO website for details and subscribe to ATO e-newsletters.
Find out more about your eligibility for superannuation on the ATO website.
Read previous articles on employment issues from the Pay Rates Working Group:
- IPEd calls for better recognition of editors in the classification of occupation standards in Australia and New Zealand (Gatherings April 2022)
- Editors are highly skilled and well educated (Gatherings March 2022)
- Employee editors – know your employment award (Gatherings February 2022)
- the report on the 2021 survey of IPEd members
By Dr Rhonda Daniels AE, member, Pay Rates Working Party