No, you are almost certainly not. The exemption is real and written down. The ATO's list of workers you do not have to pay super for includes "non-resident employees who work outside Australia", on a page last updated 15 July 2026, and paragraph 27(1)(b) of the Superannuation Guarantee (Administration) Act carries the same rule in the statute: salary or wages paid to an employee who is not a resident of Australia, for work done outside Australia, sit outside the charge.
Now notice what that exemption is keyed to.
Not the Philippines. Not the word contractor on the invoice. Residency. The statutory fact doing all the work is whether that person is a resident of Australia for tax purposes. Outstaffer sells an employer of record service built to make the question disappear, so treat that as a disclosed interest rather than a neutral observation.
The Philippines exemption is fine. The guidance under it moved in July
ATO ID 2015/24, the interpretive decision defining what "work done outside Australia" meant for that subsection, was withdrawn with effect from 1 July 2026 and its reasoning folded into a draft Law Companion Ruling, LCR 2026/D1. Draft. Not final.
A second draft is in play. The ATO's advice under development register, last updated 7 September 2026, records that draft Superannuation Guarantee Determination SGD 2026/D1 was published on 2 September 2026 and that comments close on 2 October 2026. Grant Thornton's read of it, published 10 September, is that businesses will have to separate the labour portion of a contractor invoice from equipment, materials and travel, with a documented method behind the split.
Four days from now that window shuts.
If I hire someone in the Philippines as a contractor, am I breaking Australian law?
On super, no, provided the person is a non-resident doing the work overseas. That is the test, and the two things the ATO looks at instead of your contract do not change it. What should bother you is that your answer rests on someone else's tax status, which you have never verified and hold on no document.
What happens if that person is an Australian resident
Plenty of offshore hires are Australians who moved. Then the ATO is blunt: an Australian resident employer is "not exempt from the super guarantee, even where your Australian resident employee is employed outside Australia".
The arithmetic when your contractor is not who you assumed
Take a $52,000 package. Super has run at 12 per cent of ordinary time earnings since 1 July 2025, so that is $6,240 a year unbudgeted. Two years is $12,480, and the superannuation guarantee charge on a shortfall is not deductible, which is what turns a bill into a much larger one. The same page confirms Payday Super applies to earnings paid from 1 July 2026, so the correction window is days rather than quarters. The posture is visible in the SGC letters the ATO has been sending this month.
Outstaffer publishes Employer of Record at $250 per employee per month. Three thousand a year, against a question that stops existing, because the person is employed where they live and no exemption is being relied on at all.
Related reading
- Australia Will Not Bill You For Super On Your Manila Hire
- The Work From Home Law Victoria Promised Is Still Not Law
The honest counter, which is a good one
Almost nobody gets caught. The base rate of the ATO auditing a thirty-person agency over a Manila designer is low, most offshore hires are exactly who they appear to be, and a founder who spent this week verifying residency for six people would have been better off selling. That is a fair reading of the odds, and most of the market has taken it.
It is also a bet placed without knowing the stake. Get advice for your own situation, because the answer depends on facts about individuals rather than on the arrangement's shape.
My position is narrower than rewriting your contracts. Find out the residency status of every person you pay overseas, write it down, date it. That is an afternoon. If the answer is uncomfortable for even one, sign up and price the compliant version before the draft rulings are final and somebody else asks.
So of the people on your offshore payroll, how many could you name the tax residency of without asking?
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