Contractor decision tool

The contractor decision tool is designed to assist users (be they an individual worker or a person or business who pays a worker) to understand whether they are part of a genuine independent contractor relationship.

        

Who is an independent contractor?

There is no single definition of ‘independent contractor’ as every contracting relationship is unique. Ultimately, courts determine whether a genuine independent contractor relationship exists. To do this, courts look to a number of indicators. The emphasis a court places on each indicator may vary on a case by case basis and depends on the particular facts and circumstances. If the cumulative effect of the indicators does not point towards a clear result, courts look to the totality of the relationship and whether as a practical matter the worker was carrying on their own independent enterprise.

What the contractor decision tool does

The contractor decision tool enables users to work through 16 questions that are based on the indicators that have been considered by courts.
Once you have completed all applicable questions, the contractor decision tool will generate a report which:

  • summarises the answers you have provided;
  • identifies whether each answer is more indicative of an independent contractor relationship or an employment relationship; and
  • provides an indication of the probable nature of your relationship or information to assist you to better assess that relationship.

What the contractor decision tool does not do

The contractor decision tool is a guide only and does not have any legal force or effect. It is designed to assist users to better understand the issues relevant to the distinction between an independent contractor and employee, and to help users self-assess their relationship at common law.

You cannot rely on the contractor decision tool to provide answers on a user’s status under any particular legislation (for example, some legislation treats certain contractor relationships as if they were that of employer/employee). Legislation which may require special assessment includes;

  • taxation,
  • superannuation,
  • workers' compensation, and
  • payroll.

For further information on independent contracting please visit www.business.gov.au/contractors.