The line between contractor and employee is blurring.
An employee works in your business and receives superannuation, leave and other entitlements.
A contractor pays their own superannuation, withholds tax and does not receive employee entitlements.
The ATO takes into account 7 factors to determine contractor vs employee status.
1. Basis Of Payment
Employee: Paid by the hour
Contractor: Paid to achieve a result
Employee: Must complete the job personally
Contractor: Can choose who does the job
3. Authority to accept or decline work
Employee: Has no discretion to accept or decline work
Contractor: May choose to complete a job or not
Employee: Employer will supply the tools needed to complete the job
Contractor: Must provide their own tools to complete a job
Employee: Not responsible for the outcome of a job
Contractor: Responsible for the outcome of a job
Employee: Limited control over how the task is performed
Contractor: Can complete the task in any way they see fit
7. Hours of Work
Employee: Set hours of work determined by employer
Contractor: Can complete job on any day during any hour
Do you need support with employee and contractor payroll?
Accru Felsers can help your business with employee status.
See the full article by Will Merdy, tax and business performance advisor, on the Accru website blog: Contractor vs employee: A grey area you need to get right
Please contact Will Merdy email@example.com +61 2 8226 1655 if you would like to discuss your situation.