Structures
Sole trader, partnership or company: how each is treated under the super rules
Since July, plenty of musicians have been told by a booker to "just set up a company and we won't have to deal with the super". It is not nonsense, which is what makes it dangerous. Here is how the rules actually treat each structure, and what you give up at each step.
Start with the thing everyone gets wrong
An ABN does not switch superannuation off. Not for musicians.
This is the single most common misunderstanding in the industry, and you will hear it stated with total confidence by people who have been booking bands for twenty years. The reasoning goes: I have an ABN, I send invoices, I am a contractor, contractors do not get super. The first three are true and the conclusion does not follow.
Section 12(8) of the Superannuation Guarantee (Administration) Act 1992 deems a person paid to perform to be an employee of whoever is liable to pay them. Parliament wrote it that way in 1992 precisely because the entertainment industry is full of people who invoice like businesses and work like employees. Your ABN is not part of the test. Neither is the word "contractor" in the booking email.
The rule is about people, not paperwork. What actually changes the answer is whether the payment is made to a human being or to a separate legal entity. That is the whole hinge, and it is why the structure question suddenly matters.
How the four common structures land
| Structure | Does the payer owe super on your fee? | Do you end up with super? | What it costs you |
|---|---|---|---|
| Sole trader You, with an ABN |
Yes. Every time, no minimum | Yes, automatically, at 12% | Nothing to set up. You are exposed personally for your own debts |
| Partnership You and others, one ABN |
Generally no. The payment is to the partnership | No, unless the partnership pays it | A partnership tax return, an agreement worth paying for, and joint and several liability for your partners' actions |
| Company Pty Ltd |
Generally no. The payment is to the company | No, unless the company pays you a wage, in which case it owes you super on that wage | ASIC registration and an annual review fee, a company tax return, a director ID, and an accountant you now genuinely need |
| Trust Usually with a corporate trustee |
Generally no. The payment is to the trustee | No, unless it is paid deliberately | The most expensive to set up and run of the four, and the least likely to be worth it on gig income |
Read down the third column rather than the second. The structure question is usually presented as "how do I make the super obligation go away", and the honest framing is "who ends up with no retirement savings if I do".
What restructuring actually costs
The Australian Live Music Business Council puts the median musician's income at around $14,800 a year. Set a company up against that number and look at what happens.
You will pay ASIC to register it and again every year to keep it. You will need a company tax return on top of your own, which means an accountant, because company returns are not something you knock over in myGov on a Sunday. You will need a director ID and you will take on directors' duties, which are real legal obligations rather than a formality. And you will lose the 12 per cent that was about to start arriving in your fund automatically, which on $14,800 is around $1,776 a year.
Against that, you save the venue an administrative headache. Think carefully about whose problem you have just solved.
Personal services income. A company does not automatically change your tax position either. If your income is essentially payment for your personal skill, which is what a gig fee is, the personal services income rules can attribute it straight back to you regardless of the entity it flowed through. Anyone telling you a company is a tax saving on gig money should be asked to explain the PSI rules first.
The partnership shortcut, and why it bites
A partnership is the cheapest way to become an entity, which is why it comes up first when a band starts looking for a way through this. It has one feature people consistently underestimate: partners are jointly and severally liable. If your bandmate signs the partnership up to something, or runs up a debt in its name, a creditor can come after you for all of it, not for your share.
In a working band that has been together fifteen years and shares a bank account, that may be a risk you already accept. In a pickup band assembled for a wedding season, it is a strange thing to sign up for in order to save a venue some admin.
Where the line is
Structuring your affairs deliberately is normal and legal. Australians do it constantly, and there is nothing improper about a band trading through a company because that genuinely suits how it operates: shared income, shared costs, a name that outlives the current lineup, a proper agreement about who owns the recordings.
What is not fine is an arrangement that exists on paper to make an entitlement disappear while nothing about the real relationship changes. The ATO looks at substance. If you are still turning up alone with a guitar, still being told what time to start, and the only thing that changed is that your invoice now has "Pty Ltd" on it, that is worth advice before it is worth action.
The MEAA's chief executive Erin Madeley has said the union is hearing reports of businesses looking for new ways to avoid the obligation altogether rather than fixing decades of non-payment. If the suggestion to restructure came from the person who would otherwise be paying your super, that is worth noticing.
If you do restructure, pay yourself super on purpose
This is the part people skip, and it is the part that matters most. Coming out of a structure where super arrived automatically means going into one where it arrives only if you make it. The tools are there and they are reasonably generous.
- The concessional cap is $32,500 for 2026–27, up from $30,000. That covers employer contributions, salary sacrifice and personal contributions you claim a deduction for, all in the one bucket.
- Unused cap carries forward for five years, if your total super balance was under $500,000 at 30 June of the previous year. For musicians with lumpy income, this is the single most useful rule in the system: a quiet year costs you nothing, and a good year can carry several years of unused cap at once.
- To claim the deduction you must lodge a notice of intent (ATO form NAT 71121) with your fund and get their acknowledgement, before you lodge your tax return. Miss that step and the contribution is still in your super but the deduction is gone.
A reasonable rule of thumb for a self-employed musician is to move 12 per cent of every fee into super the same week the invoice is paid, which is exactly what the law would have required of somebody else. The discipline is the hard part, not the mechanism.
The one exemption most musicians will ever use
Performers under 18 who are engaged to work not more than 30 hours a week are outside the super guarantee. That exemption used to sit in the Act itself and now sits in the payday super regulations, which is where it survived the 2026 changes.
It may not survive much longer. A Senate committee recommended removing it, and the government has indicated it supports extending super to under-18s but wants to bed down payday super first. If you book young players, treat this as temporary rather than permanent.
What the industry is asking for instead
Restructuring is a response to a rule that a lot of people think is wrong for this industry, and there is an organised push to change the rule rather than the structures.
The ALMBC's headline ask is a $5,000 threshold for sole trader performers, which its treasurer Kylie Thompson describes as modest, targeted and evidence-based. Alongside it: an age-based exemption, a hobbyist exemption, calculating super on the labour component of a fee rather than the gross, a self-managed option for ABN holders, and a free clearing house to replace the ATO's Small Business Superannuation Clearing House, which closed on the same day the new deadline started.
The pressure behind those asks is not theoretical. The Newcastle Hunter Jazz Festival cancelled its 2026 event, citing 322 sole traders across 55 acts. The Inverloch Jazz Festival cancelled too. Nigel McRae at Smith's Alternative in Canberra has gone from around a thousand payments a year to a projected three to five thousand micro transactions, some of them for five or ten dollars. Hannah Gillespie at the Majors Creek Festival has described relying on volunteers upskilling because the festival cannot afford professional help.
The ATO's answer so far has been that the reform did not change whether super is required, only when, and that extra support will be available during the transition. Nothing has been legislated to soften it.
The bottom line
Do not restructure your working life around a rule that is under active political pressure and may look different in twelve months, on the advice of somebody whose bill it reduces. If your band is big enough and stable enough that a company or a partnership genuinely suits how you operate, that is a real conversation to have with a real accountant, and the super treatment is one input among several.
If you are a sole trader playing pubs, the boring answer is almost certainly the right one. Stay a sole trader, make yourself easy to pay super to, be firm about whether your fee includes it, and let the 12 per cent accumulate in a fund for the first time in your career.
Whatever structure you land on, the invoice still has to be right
GigFee raises a proper tax invoice from your phone, with your ABN checked as you type, GST handled whether your prices include it or not, and superannuation shown as its own line. Reports and spreadsheet export your accountant can work from, when the conversation gets serious.
General information, not advice. Choosing a business structure has tax, legal and asset protection consequences that go a long way past superannuation, and the right answer is specific to you. Nothing here is a recommendation to change how you trade. Talk to a registered tax agent before you do anything on this page.
Sources: the ATO on concessional contributions caps, Accountants Daily on the under-18 exemption under payday super, and The Music on the ALMBC's proposals. Accurate as at 30 August 2026.
