Payroll, super and FBT

Employee or independent contractor

Whether a worker is an employee or an independent contractor decides which obligations a business has, including PAYG withholding, superannuation guarantee and workers compensation. The question is answered by the legal rights and obligations in the contract between the parties, which may be written, oral or a mix and can be varied by conduct, not by what the parties call it or whether the worker has an ABN. The ATO sets out factors it considers, such as control over how work is done, whether the worker supplies their own equipment, and whether they are free to delegate. The ATO also offers an online tool to help work this out. Getting it wrong can mean unpaid withholding and super for the business, so a practice should record the basis for its view.

General information, not tax advice. The rules change, so check the source page above for the current position. Fedix is developed by Tax7 R&D Pty Ltd.