Key Points

• ALMBC undertaking ongoing liaison with ATO, Tax Institute & Creative Workplaces
• Despite minimal changes overall since 1992, the move to payday super has meant the industry is suddenly dealing with another major cultural shift – this time focussed on the importance of ensuring muso’s are paid super (which of course they all deserve!)
• Member survey gained 104 responses (16 anonymous)
• Almost nobody objects to super in principle. The complaint is the method, bolted onto high-volume, low-value, one-off gigs with no consultation, guidance or support
• Numerous stories of confusion, loss of gigs and income
• ATO does not support use of a Hobby Form to remove super obligations
• ATO appeared slightly more open to consider a low threshold of payment which would negate the need for super, however flagged that any changes of this kind would require ministerial agreement and legislative change over a lengthy time period

The Survey Outcomes

• The 12% is coming out of musicians’ pockets, not going on top. Venues cant or won’t lift fees, so it’s carved out of existing and even pre-contracted rates. A $600 duo fee is now $534 in the hand.
• Work is already disappearing. Cancelled festivals (Newcastle Jazz Festival after 30+ years), bookers sacked, venues refusing sole traders, a regional Qld performer reporting gigs down 75% since 1 July.
• Nobody knows who the deemed employer is. Section 12(8) doesn’t cover door deals, ticket splits, revenue shares, contra deals, deposits or cancellation fees.
• Super on gross fees taxes the musician’s own costs. One artist’s $10,000 festival fee attracts $1,200 super, but real profit is about $1,800, so super on actual labour would be roughly $216.
• Band leaders have become unpaid payroll clerks, paying their bandmates’ super out of their own share and often receiving none themselves.
• The admin machinery doesn’t exist. The Small Business Super Clearing House closed exactly as Payday Super started, and a band leader doing four or five gigs a year faces $115 a month in software.
• Older and hobbyist musicians make no sense in the system. Members aged 75 to 84 can’t receive contributions or don’t want accounts that fees will erode.
• There’s a real advice vacuum and retrospectivity fear. Accountants never flagged s.12(8) for 30 years, government agencies never paid it, and some musicians are now demanding back pay to 1992.
• A chilling effect is in play. Most performers won’t raise super for fear of being replaced, leaving the few who do carrying all the risk.

The Suggested Fixes From Members

Top fixes called for by members include:

• letting ABN holders self-manage super (the tradie model)
• calculate on the labour component only
• de minimis thresholds
• a free clearing house
• age and hobbyist exemptions
• monthly rather than 7-day remittance
• ATO worked examples
• no retrospective enforcement.

The ALMBC’s Response

The ALMBC has firstly sought clarification from the ATO on:

1. Minimum payment threshold for s12(8) before super kicks in

• Exempt performance fees at or below a set amount (suggested $5,000) from SG; normal rules above it
• Most gigs are small payments where admin effort dwarfs the super owed
• Partnerships aren’t a workable alternative: joint and several liability, transient lineups, session players across multiple acts
• Lets the ATO focus on higher-value engagements and keeps small venues programming emerging artists

2. Hobby musician exemption

• Notes the ATO’s confirmation that a Statement by a Supplier does not remove the s12(8) obligation
• Asks the ATO to publish guidelines distinguishing hobby musicians from those carrying on a business, and exempt the hobbyists
• Hobby markers: occasional gigs, payments that just cover costs, no profit motive or business structure, day job with super
• Bonus: community orgs stop storing DOBs and home addresses insecurely

3. Clarify s12(11) private and domestic engagements

• Confirm the exemption still applies when musicians come via an intermediary (agency, partnership band, company), so neither the couple nor the intermediary owes SG
• Fix the “less than 30 hours per week” wording that some musos read as a blanket exemption. Bold the “and” or spell out it only covers private/domestic work
• Publish a worked example for the intermediary scenario

From here

The ALMBC is meeting with Treasury reps Thurs 6 Aug and following up with the ATO to share the outcomes of the member survey and share the stories and feedback, trying to help everyone understand the complexity of music industry booking arrangements and the need for further guidance form the ATO.

We will keep you closely in the loop.

What you can do

• Read through the two documents below
• Read through and watch all of the previous ALMBC Super  information if you havent already
• Go to the Creative Workplaces site and check for updates
• Get independent professional advice to ensure you are meeting your specific requirements
• Continue to share your latest stories and issues with the ALMBC