Contractor or Employee?

HomeInsights

Contractor or Employee?


Just because an agreement states that a worker is an independent contractor, this does not mean that they are a contractor for tax and superannuation purposes, new guidance from the ATO warns.


Where there is a written contract, the rights and obligations of the contract need to support that an independent contracting relationship exists. The fact that a contractor has an ABN does not necessarily mean that they have genuinely been engaged as a contractor. The ATO says that “at its core, the distinction between an employee and an independent contractor is that:

  • an employee serves in the business of an employer, performing their work as a part of that business
  • an independent contractor provides services to a principal's business, but the contractor does so in furthering their own business enterprise; they carry out the work as principal of their own business, not part of another.”


Contracts over time

The ATO points out that a contracting agreement at the start of a relationship may not continue to be one over time. For example, if the project the contractor was engaged to complete has finished, but the worker continues working for the company then the classification needs to be revisited.


What happens if there is no contract?

If no contract exists, then it’s important to look at the form and substance of the relationship to come to a reasonable position about whether an employment or contractor relationship exists.

Let's work together.

Unsure on your obligations as an employer? Get in touch with our business advisor's to assist in your business' success. 


CONTACT US  CONTACT US 



Planning For Your Retirement

WEBINAR - Registration Essential
8th August 2025 - 12:30 - 1:30.p.m

The best retirements are those planned well in advance. Because when it comes to designing the life you want, age should never be a limit. In this expert-led webinar, we’ll walk you through the essential strategies to help you create a financially secure and fulfilling retirement - on your terms.


SMSF - Using Your Super To Invest In Property

WEBINAR - Registration Essential
1st August 2025 - 12:30 - 1:30.p.m

Thinking about using your super to invest in property? Join our expert-led webinar to explore how a Self-Managed Super Fund (SMSF) can help you build long-term wealth through property investment. 


SMSF: Is It The Right Investment Strategy For You?

WEBINAR - Registration Essential
25th July 2025 - 12:30 - 1:30.p.m


Join our free webinar, SMSF: Is It the Right Investment Strategy for You?, to explore how a Self-Managed Super Fund can help you take control of your retirement in today’s changing economic landscape.

Related News

4 Jun

Reduce financial pressure with downsizer contributions

To be eligible to make a downsizer contribution to your super, you must be aged 55 or older and have owned your home for at least 10 years prior to the sale.


READ MORE READ MORE
4 Jun

What can we learn from the world’s most accomplished investors?

The investment market volatility that kicked off in March 2025 has felt like a punch, particularly for those in or nearing retirement.


READ MORE READ MORE
3 Jun

Hardship Happens. What Matters is What You Do Next

Struggling with loan repayments? Discover the truth about financial hardship arrangements, how they impact your credit, and the proactive steps you can take to regain control. 


READ MORE READ MORE