Yes, and for a business paying people overseas it is the cheapest way to end the classification argument before the regulator opens it for you. An employer of record employs the person in their own country and carries the statutory on-costs there, so your agreement buys a service rather than one individual's labour.
Which matters more this week than last.
Accountants Daily reported on 22 September that super guarantee charge letters are landing in small business inboxes at volume. One practitioner had reviewed more than 30. Some reach back to the September 2021 quarter, one ran to 19 consecutive quarters, another showed a $96,000 shortfall across 67 employees in one quarter. They open with a sentence nobody misreads: "Your data shows you may not have met your quarterly super guarantee (SG) obligations."
Outstaffer sells an employer of record that carries this exposure, so read this as a disclosed interest.
What the ATO already knows about your contractor payments
The ATO's page on how it matches data for super guarantee, last updated 21 June 2026, sets out the mechanism without drama. It uses your Single Touch Payroll reports and what the funds report back to work out what you owed each eligible worker and "whether super was paid in full and on time".
The gap is not something an auditor must go hunting for. It is arithmetic run on data you filed.
Eddie Griffith, who chairs the Affiliation for Business Restructuring and Turnaround, told the paper employers are "being treated as if they're a non-compliant taxpayer, and the letter is pretty aggressive".
The number that decides whether super applies
Is more than half the contract for labour?
That is the test, and the word on the agreement does not touch it. The ATO's guidance on super for independent contractors, updated 2 September 2026, treats a contractor as an employee for super where the contract is "mainly for their labour (more than half the dollar value of the contract is for their labour)", where you pay for personal skills rather than a result, and where the work cannot be delegated. An offshore arrangement built around one named person on your hours fails all three, which is what the ATO weighs instead of your contract.
What does the shortfall actually cost?
Virtual Coworker publishes a bookkeeper at $11 an hour AUD, an "Inclusive Hourly Rate, No Extra Fees", 20 to 40 hours a week. At 40 hours that is $22,880 a year. Super at the 2026-27 rate of 12.00 per cent is $2,745.60 on one person, $8,236.80 across three. Then the charge: the ATO adds nominal interest at 10 per cent a year from the first day of the quarter, plus $20 per employee per quarter, and says the SGC "is not tax deductible". Outstaffer publishes an employer of record at $250 per employee per month. That is $9,000 a year across three, and it is deductible.
What onboarding contractors through an EOR actually fixes
It breaks the pattern the test looks for. The person becomes the employee of an entity paying local statutory on-costs, the argument behind moving contractors onto an EOR in the Philippines.
One question worth asking out loud: can you onboard contractors through an EOR mid engagement, or does it wait for the next agreement? Mid engagement, in every market we cover.
Does it clear the back quarters?
No. Nothing does except lodging and paying. An EOR changes what you owe from tomorrow, not 2023.
Related reading
- Are your offshore contractors actually employees? The 5-question test
- Moving from an EOR to your own entity later
The honest case for doing nothing
It is stronger than the panic suggests. The ATO has said employers who try to pay on time and fix errors as they arise will not be its focus in the first year of Payday Super. A genuinely independent provider overseas, delivering a result you did not supervise, sits outside the rule. Plenty of these arrangements have run untouched for years.
The bet is that yours is the second kind. Read the agreement and ask whether more than half of it buys a person's time. Get advice on your own situation first.
If it does, the question is no longer whether to convert your contractors, only what waiting costs. Outstaffer's compliance page sets out how it runs. What would make you open that contract today rather than after the letter?
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