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Payroll Update October 2025

Employees incorrectly treated as independent contractors

The ATO is warning businesses that if they incorrectly treat an employee as an independent contractor, then they risk receiving penalties and charges, including:

  • PAYG withholding penalty for failing to deduct tax from worker payments and send it to the ATO
  • Super guarantee charge (‘SGC’), which is more than the super that would have been paid if the worker was classified correctly.  SGC consists of a super guarantee shortfall amount, nominal interest, and an administration fee, and
  • Additional SG penalties, including a penalty amount of up to 200% of the SGC.

‘Sham contracting’ may also contravene the Fair Work Act 2009. Courts can impose penalties against a business or person that incorrectly informs an employee that they are an independent contractor.

Reminder of September Quarter Superannuation Guarantee (‘SG’)

Employers are reminded that employee super contributions for the quarter ending 30 September 2025 must be received by the relevant super funds by Tuesday, 28 October 2025.  If the correct amount of SG is not paid by an employer on time, they will be liable to pay the SG charge, which (as noted above) includes a penalty and interest component.

Stay compliant, avoid penalties

If you’re unsure whether your workers should be classified as employees or contractors, now’s the time to double-check. The penalties for getting it wrong can be significant, from PAYG shortfalls to superannuation charges and Fair Work breaches.

Need help reviewing your contractor arrangements or SG obligations? Get in touch with Omnis in West Perth to ensure you’re meeting all your employer responsibilities before the 28 October SG deadline.

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Justin Flavel

Managing Director

Justin’s experience spans across 20 years in accounting, financial analysis and general business practice.

Although born and bred on the land, Justin’s interest was more in spreadsheets, ledgers, and finance which led him to attend university. In 1992, Justin graduated with a Bachelor of Business majoring in Accounting and Finance. As well as qualifying as a CPA member and becoming a Fellow of the Taxation Institute of Australia, he began gaining practical experience in small and mid-tier accounting practices.

During the late 90s, Justin decided to expand his horizons and travel through Europe. It was during this time that he seized the opportunity to expand his knowledge on the workings of large organisations by taking on roles in multinational corporations.

Today, Justin’s passion is in facilitating businesses to grow and evolve. His focus is on acting in the role of business mentor to help clients develop the full potential of their businesses. He joins clients on their unique journey, and provides the tools and knowledge they need along the way to make the right decisions.

Justin’s aim for his clients parallels his own philosophy and personal journey—focusing on his own career growth and business success while maintaining balance in his life with his wife and three daughters.

Omnis Group Managing Director - Justin Flavel