A thriving creative agency is built on two things: vision and people. But when those people are a mix of full-time designers, casual studio assistants, and a rotating list of freelancers, managing payroll can feel like a full-time job in itself.
In 2026, the Australian payroll landscape is more complex than ever. One wrong move on a contractor's status can lead to back-taxes, superannuation penalties, and heavy fines.
If you have designers who work fixed hours and have little to no control over when or how they work, they are likely employees. For them, you are responsible for:
The "Gig Economy" has changed the definition of a contractor. The ATO no longer relies purely on whether someone has an ABN. Instead, they use the "Whole of Relationship" test.
⚠️ Warning: If a freelance designer works solely for your agency, uses your iMac, and follows your exact schedule, they might legally be an employee. If they are an employee but you treat them as a contractor, this is Sham Contracting.
To avoid this, ensure your contractors are genuinely independent, use their own gear where possible, and take responsibility for their own profit and loss.
Many agency owners don't realize that some contractors are still entitled to Superannuation. If you hire a freelancer primarily for their personal labour (their design skills), rather than to achieve a specific result with their own business infrastructure, you might be required to pay their Super on top of their invoice.
The best way to manage this is through automated payroll software (like Xero or MYOB) that is correctly configured for your industry's specific awards and allowances.
Our payroll experts help creative agencies audit their contractor lists and set up automated STP systems to ensure they're always ATO-safe.
Start an Agency Payroll Audit