Stating in a written agreement that your worker is a contractor doesn’t mean they are, nor does it protect you from potential penalties for getting it wrong. This is a myth. The fact is, if your worker is legally an employee, having a written agreement will not:
- override the employment relationship or make the worker a contractor, or
- remove your tax and super obligations.
You need to look at each working arrangement and find out if your worker is an employee or contractor to understand your tax and super responsibilities for them.
So how do you get it right with your workers?
Employee/contractor decision tool
The ATO has developed a Employee/contractor decision tool that you can use to determine if your worker is an employee or contractor for tax and super purposes and what this means for your business. Click on link to find out more: ATO Contractor Decision Tool
© Australian Taxation Office for the Commonwealth of Australia