Superannuation & VAs: What Nobody Else Is In The Australian VA Industry Is Talking About

There’s a quiet legal shift underway in Australia – and for our home-grown VA industry, it’s time to sit up and take notice.

For years, our industry's catch cry has been: “We’re independent contractors. No employee entitlements. No employee-related on-costs like super.”

But in recent years, updates from the Australian Tax Office (ATO), combined with significant High Court rulings, have changed the narrative... and it’s become far more complicated.

At VA Institute, we've been sounding the alarm about these changes since late 2023, and what's become crystal clear to us is that unless we as an industry properly inform ourselves, these changes could have serious financial consequences for both VAs and the clients who engage them.

So let's start by asking ourselves the hard question: Are you genuinely operating as a business – or just calling yourself one?

The Issue at Hand: Superannuation for Independent Contractors

In a detailed article by You Legal (targeted at medical practices but entirely relevant to the VA industry), the implications are crystal clear:

If you engage a contractor who is an individual (not a company, partnership or trust), and their contract is principally for their labour, you may be legally required to pay superannuation (on top of their invoice).

And let’s not beat around the bush… this applies regardless of what your contract says.

The ATO is no longer interested in what you call the relationship. Labels don’t matter. What matters is substance over form. If it looks like an employment relationship and acts like an employment relationship, then legally it may be treated like one.

And that should concern every single Australian VA still billing by the hour, using unclear contracts, or engaging subcontractors without the proper setup.

Let’s Break It Down: What Makes a True Independent Contractor?

According to the ATO’s table of employee vs contractor indicators (you can find this information HERE on their website), here are a few key distinctions:

Trait	Employee	Independent Contractor
Control over work	Client directs how, when and where the work is done	Contractor decides how the work is performed
Payment	Paid for time worked	Paid for outcomes or results
Delegation	Cannot delegate the work	Can delegate or subcontract (if allowed by contract)
Tools & equipment	Provided by the client	Supplied by the contractor
Risk	Client bears risk for outcomes	Contractor bears risk and rectifies errors at their cost
Goodwill	Client retains the goodwill	Contractor builds goodwill in their own business

Now let’s ask the next most obvious question: How do most VAs work?

Based on the thousands of VAs we’ve supported in Australia, unless they know better (and let’s face it – no one is talking about this), most are:

• Paid by the hour

• Expected to complete tasks in set timeframes

• Unable to delegate their work

• Submitting timesheets rather than delivering defined outcomes

If that’s you – wakey wakey - you may be displaying all the traits of an employee.

Is that really what you want?

If It Walks Like an Employee…

As business owners committed to positioning ourselves professionally, we must recognise this:

If your contract and invoicing structure don’t clearly reflect a genuine independent business, then your client could be legally required to contribute to your super… even if you have your own ABN.

And if you’re engaging subcontractors in your own VA business under similar conditions, the risk falls on you.

And no – it’s not just about superannuation.

Other potential liabilities include:

• PAYG withholding tax

• Workers compensation

• Payroll tax

• Penalties for misclassification

And in case you were wondering... the legal and financial consequences are significant.

So, What Can You Do?

This conversation isn’t about fear. It’s about foresight, and being plugged into the right information before issues arise.

At VA Institute, we’re not lawyers or accountants, but we work with them to ensure our community is properly supported with tools and guidance that reflect current laws.

Here’s some steps you can take right now to futureproof your VA business:

1. Stop billing by the hour

   Sure, use your hourly rate internally if needed, but get your head around how to price based on outcomes, deliverables, or flat-fee packages (and if you don’t know where to begin, get in touch with us at VA Institute).

2. Use industry-relevant, purpose-built contracts

   Ours are drafted and reviewed with a qualified commercial lawyer. Off-the-shelf templates just won’t cut it anymore.

3. Understand your obligations when engaging subcontractors

   If you’re growing and bringing others in, this legal framework now also applies to you.

4. Get qualified advice

   Talk to your accountant or lawyer. If you're unsure where you stand, don’t post in a Facebook group hoping for the answer you want. You need the truth… not reassurance.

The Industry Is Evolving – Are You?

Let’s be real: hourly rates are easy to explain, but they no longer serve you.

They blur the lines between what constitutes a contractor and employee, they undervalue your expertise, and they invite unnecessary legal risk.

It’s time to evolve.

Let’s elevate the conversation – and the standard – together.

If you're serious about building a compliant, profitable, and respected Virtual Assistant business, then outcome-based pricing, strong contracts, and legal clarity aren’t just good practice, they are non-negotiable.

You are a business.

It’s time to act like one.