Yoga teachers and superannuation
Superannuation only needs to be paid where there is an employer/employee relationship. Often yoga teachers are (supposedly) employed as independent contractors – however this determination cannot be made simply by looking at the title given to the arrangement in the employment contract. It depends on the individual circumstances and the yoga teacher’s working relationship with the studio.
So, a yoga teacher may still be considered an employee even if labelled as an independent contractor, and quote for work done with an ABN.
For yoga studios… How do I know if my yoga teachers are employees or independent contractors?
There are a range of factors to take into account. A yoga teacher is usually considered an employee if they:
- Are paid for the time they have worked, rather than per yoga class;
- Are paid wholly or mainly (so more than half the dollar value of contract) for their personal labour or skills – physical labour, mental and artistic effort – rather than to achieve a result;
- Receive paid leave when they are sick, annual leave, long service leave;
- Are not responsible for the equipment required in class;
- Work set hours;
- Are recognised as being part of the yoga studio; and
- Cannot delegate their classes to other teachers.
The contract may be verbal or written.
A yoga teacher may be considered an independent contractor if they:
- Agree to produce a certain result for an agreed price – they are paid for results achieved rather than hours worked (this may be teaching a yoga class);
- Is free to delegate their yoga class to another yoga teacher of their choosing, whenever they like;
- Have freedom in the way work is done – they may get to choose when their yoga class is held on the schedule perhaps;
- Also provide yoga classes to the public and other businesses; and
- Is free to accept or refuse work.
Where the teaching contract is between the yoga studio and a company, trust or partnership that provides yoga teachers to the studio, this will be considered a contractor arrangement.
If you are a teacher or studio and find yourself uncertain of your position, speak to Jess to clarify your situation and legal obligations and/or entitlements.
If you are in an employee/employer arrangement, superannuation must be paid:
However, superannuation only needs to pay paid by an employer to an employee if the yoga teacher has earned $450 or more (before tax) in that calendar month.
The minimum in superannuation you must pay your yoga teacher if they are an employee is 9.5% of their ordinary time earnings. We note the following:
- You must pay this amount into the yoga teacher’s nominated fund four times a year (there are quarterly due dates),
- You must pay and report electronically in a standard format and meet SuperStream requirements, and
- If you fail to pay superannuation on time you may have to pay the super guarantee charge (this is made up of shortfall amount, interest on that amount of currently 10%, and an administration fee of $20 per quarter).
Consider your employment contract
If you are a yoga studio, Sinclair + May can draw up appropriate contracts for your current and future yoga teachers (either as employees or independent contractors). And if you are feeling uncertain about your superannuation obligations – whether they apply and how to meet them – Sinclair + May can help you navigate your way through with confidence.
If you are a yoga teacher, request employment contracts and have them reviewed before signing. Ensure you understand the terms and conditions associated with your employment. Also, do try to set aside some of your wage each week towards super (this is the last thing you want to do, probably! But very important for your financial future.)
To get in touch with one of our lawyers, you can book a free 15 minute chat here.
This is general advice only. Liability limited by a scheme approved under Professional Standards Legislation.
Published Mar 8, 2018
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