Show me the Money
Photography @movementcollective_au
There is nothing like a cranky social media post about teaching rates or superannuation to blow up a facebook group. As Australian Pilates teachers and studio owners manage beginning of a financial year, I felt it could be helpful to try and bring together some considerations for pay and negotiations in the Pilates industry.
There are many sides to what we believe we are worth to ourselves but also to our employers. In this article we explore:
What is employment and contracting in the Australian legal context?
What are the considerations of cost to a business when a person is contracted for the delivery of services?
When you are negotiating your service contract fee what is it that you are offering, which will impact a contractual rate?
A contract for delivery of services?
In many countries, including Australia, there has been a blurring of the line between employment and contracting. Arguments such as that contracting provides flexibility for all parties concerned, for what is being dubbed the “gig economy”, are often used to promote this type of work relationship. In Australia federal and state governments have issued clarifications about the differences between employment and contract to create clarity and equity for both businesses and service providers.
It is important to note that if you are trading as a company or trust, then there is no employment relationship when negotiating a service contract.
What is employment?
It is no surprise that this has been the subject of a lot of legal disputes, particularly in the construction and transport industries, where many small businesses work on distinct longer-term projects for a variety of different companies. In 2022 there were two important High Court judgments about employment versus independent contracting. The cases were the CFMMEU v Personnel Contracting [2022] HCA and ZG Operations v Jamsek [2022] These two High Court of Australia decisions clarified that the totality of the relationship between a worker and an employer consists of the legal rights and obligations arising from the contract between the parties. The Australian courts had previously held that even the existence of a valid independent contractor agreement, where the parties proceeded under a written agreement, did not automatically result in a finding that the worker was an independent contractor. These two High Court Decisions shifted the interpretation of an employment arrangement to the “primacy of the contract“ rather than the previously used multi-factor test.
I appreciate that there have been a number of people in the Pilates and fitness world who have jumped on this bandwagon and state that if we have a contract that says “we are independent contractors and not employees, it is all covered”. As with anything legal it is not as simple as that, and the Australian Tax Office (ATO) considers the implications for employment law to be as follows.
The ATO approach is that the critical differences between an employee and an independent contractor are:
An employee serves in the business, and performs their work as a representative of the business
Factors that may indicate that there are an employee relationship would be factors such as when the gym/studio has control or direction over
rostering decisions and timing of classes
uUniforms with the studio logo on it
price of classes charged to clients
the conduct, e.g. duration of classes, levels of class, programs taught
the equipment and props used are all supplied and determined by the employer. This is particularly relevant if the equipment is something like a reformer. If a person has their own large equipment in a space or is it really owned by the gym/studio.
An independent contractor provides services to a business and performs work to further their own business.
Factors that may indicate that there is a contractor relationship could be when
the contractor manages their own timetable and prices charged to the clients
the contractor manages their own booking system and schedules
the contractor takes payments directly from their own clients into their own account and makes separate payments to the business owning the space and equipment.
the contractor has responsibility and risk if a client does not turn up, or injures themselves
It is important to remember that this article is not providing you with legal advice, but guiding you towards considerations that you will need to determine when you are working out contracts and laws. My two rules of thumbs are:
If in doubt, check it out with your lawyers and get clarification about writing a contract for services.
The Australian Taxation Office has very deep pockets when it comes to legal action and pursuit of people they believe may not be complying with rules, paying tax etc. It is important to be very careful before you poke the bear on these sorts of topics.
“So if I am not an employee does that mean there are no superannuation obligations?”
The Australian Taxation office states that if a “person” works under a contract that is wholly or principally for their labour then superannuation is payable. Remembering that a person is not a company or trust. If you are providing services that are delivered by a company or trust, then the superannuation payment is not part of the service contract. The ATO is quite clear that in all other cases the superannuation should be payable by the person paying for the service contract. If you are an employee or contractor and not sure if you are entitled to superannuation payments you can contact Fairwork Australia about the enforcement of correct payments.
What about my rate of pay?
When negotiating a rate of pay whether as an employee or a contractor there are a number of considerations that will be taken into account. These considerations include:
Service inclusions and skills
Cost to business
Productivity
The individual payment rate is going to be a balance of all these considerations, and the better you understand these considerations the more capable you will be for salary negotiations.
Service inclusion and skills
This is a tough one for the Pilates world, because sometimes a person has skills but they are not being utilised by their employer because of the nature of the gym or studio. On this issue I like to think about what is the service being sought. Is the person required to work as:
A Pilates teacher that is choosing the programming for individual clients and group classes. The programming includes ongoing progressions and skills about modifications specific to the varied and complex needs and circumstances of a wide variety of clients. In other words, a highly skilled role and this payment rate may be higher but linked to the productivity constraints discussed later.
A Pilates instructor can choose the program of a group class and be able to modify and respond to the needs of a healthy client population. This position is still skilled but the scope of workplaces in which they can work is more limited and this can limit their bargaining position particularly when working with larger gyms, franchises, and enterprises.
A Pilates room monitor/supervisor, that is a person who does not design or choose the program taught, has limited capacity to modify equipment or props to support clients. The person is acting more as a monitor or supervisor for safety and insurance purposes. The person’s payment will be impacted by their employer’s need to employ other people to develop the programs and train the room monitor in how to supervise specific programs.
Part of this link of skills to pay is the issue of education and training. The reality is that not all education and training programs are equal and whilst you may have undertaken some training it may not be enough to prepare you or be transferable for you to some workplace settings. This is particularly true when the training is provided by large franchises where the training will prepare you for work in that franchise but not necessarily in other settings. This will have an impact on pay rate negotiation and transferability to other settings where the skill level and pay level may be higher.
Cost to business
When classified as a full-time or part-time employee an employer will generally calculate your wage based on a base rate plus on-costs, which is around 25-27%. The on-cost calculations include annual leave (remember it is 4 weeks for full-time employees in Australia); personal and carers leave (around 10 days for full-time employees in Australia); public holiday payments; worker’s compensation insurance costs (which is different in each state and territory); superannuation which from 1 July 2025 will be 12 % of base rate).
The calculation of a base rate would refer to an industry award, and in the Pilates industry those awards include the Fitness Industry Award amongst others. Many people in the Pilates profession will use a higher base rate for Pilates teachers linked to productivity (discussed below).
This cost of business means that whilst your in-hand salary may seem low, the access to these other benefits means that your cost to business is much higher. Here is an example:
Your base rate is $45 per hour gross. However, once all your leave entitlements and superannuation are calculated your cost to your employer is $56.25 per hour, plus superannuation of $5.40 (at 12 %). This means that your cost to business would be $61.65. It is the reason why there is a difference between a casual employee rate and a full-time or part-time rate. That higher rate paid to the casual employee is known as the casual loading. When you take out the superannuation loading for the casual employee the additional cost or loading would be 25%. That means that the casual rate with loading would be about $56.25 plus superannuation, and is paid to you upfront but you are not covered for sick leave, annual leave, public holidays and so forth.
For casual employees it is important to note that after a certain period of time (between 6 and 12 months depending on the size of the employer) there is a right to request formalisation of the employment status to become a full-time or part-time employee. There are special rules about this and it is best to check with Fairwork Australia for your own individual situation. Remember though, if you change your employment status from a casual employee to a full or part-time employment your base rate changes because the employer is now including all of the other business-related costs and will pay you annual leave, sick leave, public holidays etc.
If you are working as an independent contractor similar considerations are going to impact your rate of pay. Remember as an independent contractor delivering a service the business owner will still have to pay the superannuation rate.
Productivity
Now this is a big consideration and very important when a business owner is going to be looking at the rate of payment. If you are negotiating your rate of pay you need to balance these factors in. Essentially productivity looks at how much money you can generate for the business based on the service you provide. In the case of a Pilates practitioner whether it be teacher, instructor or supervisor it is a matter of how many clients you see and how much these clients are paying to see you.
The paying bit is a challenge for those people working in large gyms, reformer studios, and franchises where client payments are often through membership fees. These fees can vary particularly when there are all sorts of member-attracting specials e.g. 6 classes for $60 or challenge packs or Class Pass, all of which lower the rates a person is paying for their classes. This lower client payment rate feeds into the productivity equation, that is if the money coming in is not high then the employer has to moderate their staff pay rates. I would never assume that having 20 reformers in a class is generating the maximum rate of payment for the business owner. There is not always transparency as to how much classes are generating and how that contributes to productivity.
As a business owner for nearly 25 years now, I am also considering a teacher’s consistency in building and maintaining clients. My experience is that the more skilled a teacher is, that is well trained and experienced, the greater the consistency and commitment to their profession as a Pilates teacher. This is a big factor when I weigh-up productivity, as a long-term consistent staff member who works towards inhouse referrals, is generally more supportive of productivity. This is because productivity is lost when you have high staff turnover and disruption that can affect client satisfaction and engagement.
Conclusion
Running a Pilates business is not for the faint of heart, it requires balancing quality service in a competitive market. Quality and consistent staff are a crucial element of running a Pilates business, and as such finding that sweet spot of staff and business owner profitability requires goodwill and consideration on both sides. For you as an instructor I would be very cautious about working in environments where there are constant specials and Class Pass arrangements that are undermining the revenue and as such your pay.
This article was written to help provide different perspectives and considerations.
Carla Mullins is the Director of Body Organics Education a pilates certification body and continuing education provider. To learn more and participate in classes, tutorials and ongoing education become a foundation subscriber for $AUD240pa with HTTPS://BODYORGANICS.SUBSTACK.COM/