One of the most common payroll mistakes businesses make is assuming that if someone is a contractor, there is no obligation to pay superannuation.

Unfortunately, that’s not how Australia’s superannuation laws work.

With Payday Super now active, requiring super to be paid on regular pay days rather than quarterly, now is an ideal time to review your contractor arrangements.  Underreporting or misclassifying a worker means sudden, compounding liabilities on every pay run.

ACN Contractors (Pty Ltd Companies)

Where your contract is with an incorporated business (for example, a Pty Ltd company with an Australian Company Number (ACN)), the company is responsible for meeting any superannuation obligations for its own employees or directors. 

ABN Contractor Super Rules (Sole Traders)

For sole traders, the Australian Taxation Office (ATO) applies rules that are different from employment law.  Just because a person who does some work for you:

• has an Australian Business Number (ABN),
• submits invoices, and
• calls themselves a contractor,

does not automatically absolve you from paying superannuation on their behalf.

In respect of superannuation, the ATO operates under section 12(3) of the Superannuation Guarantee (Administration) Act 1992.  Under section 12(3), a person working under a contract that is wholly or principally for their labour, may be treated as an employee for superannuation purposes, even though they are a contractor and invoice you.

Importantly, the ATO looks at the substance of the working arrangement, not simply what the contract calls the relationship

The ATO generally considers the following questions:

✔️ Is the contractor being engaged mainly for their labour and skills?

✔️ Are they required to perform the work personally?

✔️ Are they being paid for their time and effort rather than simply delivering a completed result?

If the answer to these questions is generally “yes”, there is a strong possibility that superannuation contributions are required.

The Cost of Missing Contractor Superannuation Obligations

If superannuation should have been paid but wasn’t, businesses may become liable for:

• unpaid Superannuation Guarantee contributions;
• the Superannuation Guarantee Charge (SGC);
• interest; and
• additional administrative penalties.

Because these liabilities can accumulate over several years, reviewing contractor arrangements before issues arise can save significant time and money.

A Simple Reminder

Before assuming a contractor is not entitled to super, ask yourself:

• Am I contracting with an individual sole trader (ABN) or a company (ACN)?
• Am I paying primarily for that person’s labour?
• Are they required to perform the work themselves?
• Am I paying for their time and skills rather than simply purchasing a completed result?

If you’re unsure, it’s worth reviewing the arrangement against the ATO’s guidance.  A few minutes spent checking today may prevent an expensive Super Guarantee liability tomorrow.  

This article provides general information only and should not be relied upon as legal or taxation advice.  Businesses should consider obtaining professional advice based on their specific circumstances.

📌 Frequently Asked Questions: 

Wayne Wanders is an experienced Business Advisor and Outsourced CFO who can help to scale and grow your business profitably. 

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

Click on the below buttons to access free Resources developed by Wayne Wanders, A Real CFO to help your business scale and grow profitably

And Wayne is always posting about new grants, funding options and other resources on LinkedIn that can help your business scale and grow profitably.  Click on the below links and connect with Wayne or follow A Real CFO on LinkedIn.

Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052

⚠️ The First Payroll You Process Could Be the Most Dangerous Payroll You’ll Run All Year.

Why?

The first payroll of the 2027 financial year is where two significant changes collide.

⚖️ One could expose your business to an underpayment claim.

💰 The other could quietly squeeze your cash flow.

📈 Mistake #1 – Thinking It’s Just a Wage Increase

Every July I hear the same question.

“What’s the wage increase this year?

It’s the wrong question.

The better question is:

“What do I need to change in my payroll?”

The Fair Work Commission’s Annual Wage Review isn’t simply about applying one percentage increase across your workforce.

This year’s decision includes structural adjustments to some award classifications, meaning not every employee’s minimum pay rate changes in the same way.

If you simply apply a blanket increase, you could still end up underpaying employees.

That’s particularly risky if you employ staff under modern awards, pay annual salaries, or rely on above-award rates.

Before processing your first payroll, ask yourself:

✔ Have all employees been correctly classified?

✔ Has your payroll software been updated with the new award rates?

✔ Are casual rates, penalties and allowances correct?

✔ Do your annual salary arrangements still satisfy award obligations?

✔ Are employees paid above award still genuinely above the new minimum requirements?

🚨 Remember…

An honest mistake is still an underpayment.

💸 Mistake #2 – Treating Payday Super as “Someone Else’s Problem”

Most of the discussion around Payday Super has focused on compliance.

I think that’s missing the real issue.

💵 Cash flow

As businesses transition to paying super with every payroll, money that once stayed in your bank account until the quarterly due date will begin leaving much sooner.

For some businesses, that won’t be a problem.

For others, it will expose cash flow weaknesses and raise the question, will you have the cash available every payday to pay it.

🛑 Don’t Treat This Payroll as “Business as Usual”

Before you click Process Payroll, stop and ask yourself:

✔ Are employee classifications correct?

✔ Have the new award rates been applied?

✔ Are casual loadings, penalties and allowances accurate?

✔ Do annual salary arrangements still pass the compliance test?

✔ Have you considered the impact of more frequent super payments on your cash flow?

Payroll isn’t just about paying your employees.

It’s one of the biggest compliance and cash flow risks your business manages.

Get this payroll right and you’ll probably never think about it again.

Get it wrong and you could be dealing with underpayments, back pay, penalties or cash flow pressure for months to come.

That’s why the first payroll you process this financial year could be the most dangerous payroll you’ll run all year.

📌 Frequently Asked Questions: The July 2026 Payroll Collision

Wayne Wanders is an experienced Business Advisor and Outsourced CFO who can help to scale and grow your business profitably. 

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

Click on the below buttons to access free Resources developed by Wayne Wanders, A Real CFO to help your business scale and grow profitably

And Wayne is always posting about new grants, funding options and other resources on LinkedIn that can help your business scale and grow profitably.  Click on the below links and connect with Wayne or follow A Real CFO on LinkedIn.

Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052

The Fair Work Commission’s (FWC) Annual Wage Review decision takes effect from 1 July 2026. If your business employs staff under a modern award or relies on the National Minimum Wage, now is the critical window to audit your payroll systems and ensure strict compliance.

A common mistake among business owners is assuming that every employee simply receives a flat 4.75% increase. That is not the case for the 2026 financial year. Under the FWC’s latest structural adjustments, some employees on the lowest award classifications will receive a higher, targeted increase than the standard headline rate due to the Stage 1 phase-out of the C13 classification.

Failing to adjust these specific pay scales correctly places businesses at severe risk of involuntary underpayment claims and Fair Work Ombudsman (FWO) penalties.

📋 Your 1 July 2026 Payroll Audit Checklist

To safeguard your business against compliance issues, employers should execute a mini payroll audit before processing the first pay cycle in July. Follow these six essential steps:

Confirm Each Employee’s Modern Award Classification

Do not assume last year’s classifications still apply. Review staff roles to ensure their daily duties still align with their current award definitions. Pay close attention to employees who have:

• Taken on more responsibility
• Aged up (junior rates)
• Completed apprenticeships

Any of these milestones may automatically bump them into a higher pay bracket.

Source Official 2026 FWO Pay Guides

Avoid relying on third-party calculators or outdated blogs. Download the official, updated pay guides directly from the Fair Work Ombudsman (FWO) website as soon as they are published in mid-June. Ensure you are looking specifically at the rates marked effective 1 July 2026.

Run Comparative Pay Rate Audits

Line up your existing employee base hourly rates against the newly mandated minimums.

• National Minimum Wage: Ensure anyone on the base rate is moved to $26.44 per hour ($1,004.90 per week).
• Casual Employees: Remember that casual loading (typically 25%) must be recalculated based on the new, higher base rate.

Review Salaried and Annualised Wage Arrangements

If you pay staff an all-inclusive annual salary, you must perform a reconciliation. Ensure that the annual salary is still high enough to cover the new minimum award rates, including any overtime, weekend penalty rates, or allowances the employee actually worked. If the new award minimum outpaces the salary, you must top it up.

Forecast On-Costs (Superannuation & Leave Liabilities)

A wage increase does not happen in a vacuum. It triggers a cascading financial impact across your entire business overhead. Remember to factor in:

• Superannuation Guarantee (SG): Ensure your cash flow accounts for both the higher gross wage and your super obligations.
• Leave Liabilities: Long service leave and annual leave balances must be revalued on your balance sheet to reflect the new, higher hourly pay rates.
• Payroll Tax and Workers’ Compensation: Higher wages will incrementally bump up your state payroll tax obligations and insurance premiums.

⚖️ Do You Have to Increase Above-Award Pay?

A frequent point of confusion for employers is whether the 2026 wage increase applies to staff members who are already paid above the minimum rate.

The short answer: The Annual Wage Review legally changes the minimum safety net.

If an employee is already paid a flat contract rate that sits safely above the newly revised 2026 minimum award rate (including all applicable allowances and penalties), there may not be a legal requirement to increase their pay.

⚠️ Warning: Do Not Guess the Math

Every employee must be reviewed individually. If an above-award rate is absorbed by the new increase, the buffer you once had shrinks. If that employee works significant overtime or night shifts, their flat rate might suddenly fall below the new legal minimum.

The businesses that find themselves facing costly back-pay orders are rarely malicious; they are usually the ones that assumed the changes didn’t apply to them because they “pay well.” Taking a few hours to meticulously audit your payroll data now is the only way to prevent a systemic underpayment issue later.

Wayne Wanders is an experienced Business Advisor and Outsourced CFO who can help to scale and grow your business profitably. 

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

Click on the below buttons to access free Resources developed by Wayne Wanders, A Real CFO to help your business scale and grow profitably

And Wayne is always posting about new grants, funding options and other resources on LinkedIn that can help your business scale and grow profitably.  Click on the below links and connect with Wayne or follow A Real CFO on LinkedIn.

Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052

Most hiring decisions don’t fail because the role was wrong.

They fail because the timing and expectations were wrong.

On paper, it often looks fine.
Revenue is growing. The team is stretched. There is enough cash in the bank.

So, the hire feels justified.

But two questions matter more than anything.

📍 Can your business actually afford to hire this employee from a cash flow perspective
📍 What does success look like for this hire

What Does It Really Cost to Hire an Employee?

It is never just salary.

A $100k employee is usually closer to $120k to $140k once you include superannuation, payroll tax, tools, systems, and the reality that productivity is lower in the early months.

Most of that cost hits before you see the return.

This is where many hiring decisions create pressure on cash flow.

Define What Success Looks Like Before You Hire

Before hiring a new employee, you need to define what success actually looks like.

Not “help the team” or “support growth”.

Clear outcomes.

📍 What is this person responsible for
📍 What do they need to deliver
📍 When should you start seeing results

That might mean generating a defined amount of revenue within six months, freeing up time to focus on sales, or removing a bottleneck that is slowing the business down.

If you cannot define success clearly, you cannot measure whether the hire is working.

When Will the New Employee Pay for Themselves?

This is the question most businesses skip.

You need to understand how long it will take for the hire to generate or support cash coming into the business.

In many cases, the timeline looks like this.

📍 Hire starts today
📍 Productive in 2 months
📍 Work invoiced in month 3
📍 Cash lands in month 4 or 5

That creates a gap of several months where the business is funding the cost before seeing any return.

This is where cash flow pressure builds.

How Hiring Impacts Your Cash Flow

Hiring a new employee affects cash flow immediately.

Costs increase from day one, while revenue or efficiency gains take time.

Before making a decision, you need to map your expected cash flow over the next 90 to 180 days.

Look at what cash is currently available, what payments are already committed, and when income is realistically expected to come in.

Then add the impact of the new hire.

If cash becomes tight at any point, not just overall, the business is exposed.

Because most businesses do not fail due to lack of profit.

They fail because they run out of cash at a specific point in time.

Final Thought

Hiring an employee is not just a growth decision.

It is a cash flow decision.

If your business can support the timing gap and you are clear on what success looks like, hiring can accelerate growth.

If not, it can create pressure very quickly.

If you are thinking about hiring and are unsure how it will impact your cash flow, this is usually where we start with clients, mapping the numbers and defining what success needs to look like before the decision is made.

Wayne Wanders is an experienced Business Advisor and Outsourced CFO who can help to scale and grow your business profitably. 

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

Click on the below buttons to access other free Resources developed by Wayne Wanders, A Real CFO to help your business scale and grow profitably

Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052

Too many business owners try to become good at everything.

Finance. Sales. Operations. People. Strategy.

It’s exhausting,  and it doesn’t scale.

What Strong Leaders Do

They build teams that balance them out.

Instead of fixing every weakness, they hire people whose strengths cover the gaps.

That’s not avoiding responsibility.
That’s building a business that can grow.

Where Growth Slows

Most founders stop there.

But over time, it’s not your weaknesses that hold the business back.

It’s your strengths.

Early Days vs Reality

In the early days, your strengths are the business.

You close deals.
You manage relationships.
You solve the hardest problems.

Until everything starts flowing through you.

When Strength Becomes the Bottleneck

🔸 The best salesperson becomes the limit on revenue
🔸 The strongest operator becomes the choke point
🔸 The founder who “owns everything” slows the business

Growth isn’t constrained by opportunity.
It’s constrained by you.

The Shift That Unlocks Scale

🔹 Hire to cover your weaknesses
🔹 Delegate what you’re best at

Most do the first.
Very few do the second.

Why It’s Hard

Letting go of weaknesses is logical.

Letting go of strengths feels risky.

🔸 “No one will do it as well as me”
🔸 “What if quality drops?”
🔸 “Where do I add value now?”

The Reframe

You don’t delegate strengths because others are better.

You do it because:

🔹 It can be systemised
🔹 It can be repeated
🔹 It shouldn’t depend on one person

Strong businesses are built by well-balanced teams, not well-rounded individuals.

A Simple Test

If you stepped away for 90 days, what would break?

🔸 A weakness you haven’t covered
🔸 A strength you haven’t let go of

Both matter.

Final Thought

Early-stage growth comes from founder capability.

Scale comes from distributing that capability.

And the inflection point usually comes when you let go of the thing you’re best at.

If you’re navigating this shift, you’re not alone.

Wayne Wanders is an experienced Business Advisor and Outsourced CFO who can help to scale and grow your business profitably. 

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

Click on the below buttons to access other free Resources developed by Wayne Wanders, A Real CFO to help your business scale and grow profitably

Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052

Last week the Australian Taxation Office and the Fair Work Ombudsman signalled an increased focus sham contracting where businesses incorrectly classifying workers as independent contractors.

This matters because if someone is legally an employee, they are entitled to protections under the Fair Work Act 2009 including:

🔹 minimum pay
🔹 leave entitlements
🔹 superannuation
🔹 unfair dismissal protection

But it’s not just an employment law issue.

The ATO is also concerned because sham contracting can mean certain tax obligations are avoided or underpaid.  For example, treating someone as a contractor rather than an employee can affect your PAYG withholding obligations.

This is why the ATO and Fair Work regulators often share intelligence when reviewing contractor arrangements.

If a business labels someone a contractor but they are actually an employee, the potential exposure can include:

🔹 back payment of wages
🔹 unpaid superannuation
🔹 PAYG withholding liabilities
🔹 penalties for sham contracting

This issue has become even more important following changes introduced by the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024.

The law now focuses on the “real substance, practical reality and true nature of the relationship.”

In other words:

It’s no longer enough to rely on what the contract says.

Regulators will look at how the working relationship actually operates in practice.

For many businesses that rely on contractors, now may be a good time to review whether those arrangements still hold up under the new rules.

Here is a link to a simple checklist business owners can use to assess whether someone is more likely an employee or a contractor.

Wayne Wanders is an experienced Business Advisor and Outsourced CFO who can help to scale and grow your business profitably. 

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

Click on the below buttons to access other free Resources developed by Wayne Wanders, A Real CFO to help your business scale and grow profitably

Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052

Following changes to employment laws and the crackdown by the ATO and FairWork on sham contracting, the distinction between employees and contractors is becoming more important for business owners.

Under the Fair Work Act 2009, regulators don’t rely on a single test. Instead, they look at the totality of the relationship.

The Fair Work Ombudsman and courts commonly examine factors such as:

1. Control over the work – The more the business directs how work is done, the more it resembles employment.

2. Mode of remuneration – Hourly or wage-style payments often indicate employment rather than contracting.

3. Ability to delegate – Independent contractors can usually subcontract or delegate the work.

4. Provision of equipment – Employees typically use tools and equipment supplied by the business.

5. Nature of the work – Is the person providing a separate professional or trade service, or filling a role within the organisation?

6. Performance expectations – Daily operational KPIs may suggest employment, while outcome-based deliverables are more consistent with contracting.

7. Contractual terms – The agreement still matters, but it is no longer the deciding factor.

8. Business independence – Is the person genuinely running their own business with multiple clients?

No single factor determines the answer.

What matters is the overall substance of the relationship.

A useful question for business owners to ask is:

“Does this person look like they run their own business, or do they look like part of ours?”

If the answer isn’t clear, the arrangement may be worth reviewing.

One additional point from the recent reforms.  Changes introduced a high-income contractor opt-out.

If an individual contractor earns above the contractor high income threshold (currently $183,100 per year for the 2025-26 tax tear), they may choose to opt out of the new employment test by providing a written notice.

Importantly, the contractor can withdraw that opt-out notice at any time.

For many businesses, however, the practical question will still come back to the same issue:

A simple rule of thumb:

If the person looks like part of your organisation, regulators will likely view them as an employee.
If they look like they run their own business, they’re more likely to be a contractor.

Does this person genuinely run their own business, or do they look like part of yours?

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

Click on the below buttons to access other free Resources developed by Wayne Wanders, A Real CFO to help your business scale and grow profitably

Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052

AI is an extraordinary tool. Used well, it becomes a force multiplier for your people, extending their reach, range, and capabilities. But tools do not make decisions. People do.

What employees need are not promises about AI replacing roles, but practical technologies that help them think better and act faster. AI augmentation does exactly that—it amplifies human effort rather than substituting for it.

Extending Reach

AI allows individuals to achieve more without increasing hours. Research, modelling, drafting, and analysis can be completed faster and more consistently. One person can now operate at a level that once required a team.

Expanding Range

AI broadens the scope of what people can confidently engage with. Leaders can explore financial scenarios, assess trade-offs, and pressure-test ideas even when those areas sit outside their core expertise. AI reduces friction between disciplines—but it does not remove complexity.

Strengthening Capabilities

AI improves the quality of thinking by surfacing options, patterns, and risks. It accelerates insight. But it does not understand context, consequences, or accountability. It cannot balance competing priorities, read organisational dynamics, or take responsibility for outcomes.

This is where the difference between information and judgement matters.

AI can generate answers. People decide which answers matter.
AI can model scenarios. People choose which path to take.
AI can support thinking. People own the consequences.

The most effective organisations do not try to replace human judgement with technology. They use AI to raise the baseline capability of their teams, while relying on experienced people to interpret insight, challenge assumptions, and commit to decisions.

The organisations that win with AI will not be those that ask it for answers, but those that use it to enable better conversations, stronger judgement, and more confident decisions—made by people who understand the business, the risks, and what is truly at stake.

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

Click on the below buttons to access other free Resources developed by Wayne Wanders, A Real CFO to help your business scale and grow profitably

Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052

Leaving aside the 121 Modern Awards, one issue keeps coming up with business owners:

👉 Who is actually an employee, and who is an independent contractor?

Despite the 2024 Fair Work changes, the answer is still: it depends.

Because worker classification isn’t governed by one law.
It’s governed by at least four:

• Fair Work Act
• Superannuation law
• Payroll tax (state-based, up to 8 versions)
• Workers compensation (also state-based)

That means the same worker can be:

• An independent contractor under the Fair Work Act
• An employee under superannuation law, triggering a super obligation
• An employee for payroll tax purposes, meaning no super, but payroll tax applies
• And then there’s workers compensation… which may or may not apply again

One worker. Four definitions.

For small business, this isn’t just annoying, it’s a productivity drain:

• Time and money spent on advice, not growth
• Higher compliance risk
• Less confidence to hire locally

So, businesses adapt.

More work gets pushed offshore.
Not because the talent isn’t here — but because the system is too hard to navigate.

Complexity doesn’t create fairness.
It creates hesitation.
And hesitation is killing small business productivity.

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

Click on the below buttons to access other free Resources developed by Wayne Wanders, A Real CFO to help your business scale and grow profitably

Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052

Last week I wrote about business being a team sport, and how success depends on everyone pulling in the same direction. I also spoke about how the “I” in the A-hole of team can quietly undermine performance.

Today, I want to look at what might seem like the opposite idea:
the “I” in win — and why it actually strengthens a team.

Think about a cricket team. Eleven batters walk out to the crease.  If each one assumes someone else will score the runs, the scoreboard won’t move very far, and the team will lose (as we have seen in the recent Ashes series with tests lasting 2 days).

Or take football. If every player waits for someone else to score the goal or try, the result is predictable.

Winning teams are made up of individuals who take responsibility.

That’s the real meaning of the “I” in win.

Each person owns their effort, attitude and contribution, even if someone else ends up scoring the winning run, try or goal.

And in business, especially right now, winning may simply mean surviving, adapting and staying strong.

To do that:

• ✅ Every team member must take responsibility for performance: be the “I” in win.
• ⚠️ And any “I” in the A-hole of team needs to be addressed quickly and constructively.

Because teams don’t win by accident.

They win when individuals choose to show up, step up, and take ownership.

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

Click on the below buttons to access other free Resources developed by Wayne Wanders, A Real CFO to help your business scale and grow profitably

Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052