Some owner-drivers and other contractors count as employees for super, and Payday Super changes when you pay it. The ATO says you generally need to pay super for a contractor who is paid mainly for their labour, even if they have an ABN, invoice you, or are called a contractor in a written agreement. From 1 July 2026, if you pay that contractor by invoice, the payday is the date the invoice is paid, and super must reach their fund within 7 business days. For a transport business, that turns the subcontractor bill run, often driven by recipient-created tax invoices (RCTIs), into a payroll event. This article covers who is likely to be caught, how super becomes part of the bill payment run, and how to keep your transport management system (TMS), RCTIs and accounts in step. It is general information, not tax or legal advice.
When does an owner-driver count as an employee for super?
The ATO calls this the extended definition of employee. Its Payday Super guidance for contractors says:
- You generally need to pay super if the contractor is paid mainly for their labour.
- That can apply even if they have an ABN, invoice you, or are described as a contractor in a written agreement.
- If you are paying for their personal effort, skills or time rather than to deliver a specific result, super is likely required.
Owner-drivers are a grey area because many supply a truck. Courts have found that drivers who supplied and maintained their own trucks were not engaged mainly for their labour (the Jamsek case is the well-known example), because the truck was a substantial part of what they were paid for. A driver who drives your truck and invoices you for their hours is a different situation. Every arrangement turns on its own facts, so get your accountant or adviser to work through your contracts.
The ATO also says Payday Super does not change who is eligible. If you already had to pay super for a contractor, you still do. What changed is when.
How super becomes part of the bill payment run
Under quarterly super, a business could pay owner-drivers through accounts payable all quarter and work out their super later. Under Payday Super, each payment starts its own clock:
- The driver's work is recorded in the TMS: runs, loads, hours, kilometres.
- An RCTI (or the driver's own invoice) is produced and entered as a bill in Xero or MYOB.
- The bill is paid in a supplier payment run.
- That payment date is the payday. Super on the labour part of the payment must reach the driver's fund within 7 business days.
The super has to be worked out on the right amount. The ATO's guidance on super for independent contractors is that super is worked out on the labour component of the contract, leaving out payments for materials and equipment, and GST. If your RCTI shows one line for a whole run, nobody can see the labour component without going back to the TMS.
Reporting
According to the ATO, if you don't currently report contractors through Single Touch Payroll you don't have to start because of Payday Super. If you do report them, from 1 July 2026 you need to report both their qualifying earnings and the super liability.
The first year
The ATO's first-year approach (1 July 2026 to 30 June 2027, set out in PCG 2026/1) looks at whether you are trying to pay each payday and fixing problems quickly. That is a reason to set the process up properly now, not to wait.
Where TMS, RCTIs and the accounts drift apart
Most carriers have three places the same driver payment lives:
- The TMS holds the work: jobs, rates, surcharges and adjustments.
- The RCTI process turns that work into a tax invoice the driver receives. Some TMS products produce RCTIs; others export to a spreadsheet first.
- Xero or MYOB holds the bill, the payment and, where super is paid through payroll, the super.
The common gaps:
- Labour isn't split out. The RCTI carries a run rate, and the labour part is estimated at quarter end instead of calculated each time.
- Super is paid from a separate list. Someone keeps a spreadsheet of "drivers we pay super for", and it falls out of date when drivers change.
- Payment runs and super runs aren't linked. Bills are paid on Friday, but super for those drivers waits for the next employee pay run, which may fall outside the 7 business days.
- Rate changes don't flow down. When customer rates or surcharges change, such as a fuel levy adjustment, the TMS and customer invoices update but the driver's RCTI rate doesn't, or updates late. That creates adjustments, and adjustments to labour also carry super.
- Fund details are missing. Owner-drivers often aren't set up with fund details because they were never treated as payroll.
Keeping them in step
The fix is mostly process, with some joining-up between systems:
- Decide who is in. With your adviser, list which drivers and contractors your business treats as employees for super, and record that once, in one place.
- Split labour on the RCTI. Calculate the labour component for each payment from the TMS data, so super has a clear base.
- Tie super to the payment run. When a bill for an in-scope driver is paid, the super for that payment is created at the same time and paid within the deadline.
- Reconcile weekly. Compare RCTIs issued, bills paid and super paid for each driver every week, not every quarter.
- Let rate changes flow once. A rate or levy change entered in the TMS should reach customer invoices and driver RCTIs from the same entry.
If your TMS and accounting connector already does this, use it. Where it stops short, we build the missing pieces. See RCTI automation and fuel levy and owner-driver payments, or the wider transport and logistics page. If RCTIs are new to you, start with what an RCTI is.
Frequently asked questions
Do I have to pay super for owner-drivers?
Only if they count as employees for super, which generally means they are paid mainly for their labour. Drivers who supply and run their own trucks often aren't, but it depends on the contract and how the work is actually done. Check with your accountant or adviser.
When is super due for a contractor paid by RCTI or invoice?
The ATO says that if you pay a contractor by invoice, the payday is the date the invoice is paid. Super must reach the fund within 7 business days of that date.
Do we pay super on the whole RCTI amount?
Usually not. The ATO says super is worked out on the labour component, leaving out payments for materials and equipment, and GST. Your adviser can confirm how to work out that component for your contracts.
Can Xero or MYOB pay super on supplier bills?
Not on their own. Supplier bills and payroll super are separate in both. The usual approach is to create the super liability for in-scope drivers from the bill payment and pay it through your super process, or set those drivers up in payroll. Which suits you depends on your volumes and your adviser's view.
Does the fuel levy affect super?
Ask your adviser how fuel levies and other cost recoveries should be treated for your contracts. Whatever the answer, keep the levy on its own line on the RCTI so it can be included or left out of the labour component cleanly.
If your owner-driver payments, RCTIs and super live in different places, book a free initial chat. We'll tell you honestly what your current systems can handle and what needs joining up.